Capital Gains Tax can arise in far more situations than simply selling an investment for a profit.
Selling a second property, gifting an asset to a family member, transferring ownership, disposing of shares or even exchanging one cryptoasset for another could potentially create a Capital Gains Tax liability.
The tax is generally charged on the gain rather than the total value of the asset. However, what you ultimately pay can depend on your income, the type of asset, its original cost, available losses and whether any tax reliefs apply.
With the Capital Gains Tax annual exempt amount now just £3,000 for individuals in 2026/27, understanding the rules before making a disposal is increasingly important.
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Planning to sell, gift or transfer a valuable asset?
Download our full Spotlight on Capital Gains Tax report for a detailed guide to the 2026/27 rules, rates, allowances and reliefs to consider before taking action.
1. Capital Gains Tax Can Apply Even When You Do Not Sell an Asset
A Capital Gains Tax disposal does not necessarily involve receiving money.
A disposal can include:
- Selling an asset
- Giving an asset away
- Transferring ownership
- Exchanging one asset for another
- Receiving compensation for an asset that has been lost or destroyed
Common chargeable assets include second homes, investment properties, shares held outside an ISA, business interests, land, certain valuable personal possessions and cryptoassets.
This is particularly important when gifting assets.
Giving something valuable to a family member does not automatically remove the Capital Gains Tax liability simply because no money changes hands.
2. The Capital Gains Tax Allowance Is £3,000
For 2026/27, individuals have a Capital Gains Tax annual exempt amount of £3,000.
This applies across your net chargeable gains for the entire tax year. You do not receive a separate £3,000 allowance for every asset you sell.
Unused allowance also cannot be carried forward into another tax year.
For example, if you made an £8,000 gain on shares but had a £2,000 allowable loss on another investment, your net gain would be £6,000.
After using the £3,000 annual exempt amount, £3,000 would remain chargeable, assuming no other gains, losses or reliefs applied.
The relatively small allowance means even modest gains can now create a Capital Gains Tax liability.
3. Capital Gains Tax Rates Depend on Your Income
For disposals from 6 April 2026, the main Capital Gains Tax rates for individuals are 18% and 24%.
The rate you pay depends partly on your taxable income.
Gains falling within your available basic rate band are generally taxed at 18%, while gains above the available basic rate band are generally taxed at 24%.
This means the same gain could produce a different tax bill for two different people.
Your expected income for the year should therefore form part of your Capital Gains Tax planning rather than looking at the gain in isolation.
You can find further information through GOV.UK’s Capital Gains Tax guidance.
4. Gifting an Asset Can Still Trigger Capital Gains Tax
One of the biggest Capital Gains Tax misconceptions is that gifting an asset avoids tax.
Usually, it does not.
When a chargeable asset is given to another person, HMRC will generally treat the disposal as taking place at its market value.
The same principle can apply when an asset is deliberately sold for less than its true value.
For example, the report considers an investment property purchased for £150,000 that is now worth £300,000.
Giving that property to an adult child for nothing would not normally mean the disposal value is £0. Broadly, the Capital Gains Tax calculation would begin using the property’s £300,000 market value.
This could leave you with a tax bill despite receiving no cash from the transaction.
5. Different Rules Apply Between Spouses and Civil Partners
Transfers between spouses and civil partners who live together generally take place on a no gain/no loss basis for Capital Gains Tax.
Rather than immediately creating a taxable gain, the recipient effectively inherits the existing Capital Gains Tax history of the asset.
This can create legitimate planning opportunities before an eventual sale.
For example, ownership might be worth reviewing where one spouse has unused annual exemption, available capital losses or more unused basic rate band.
However, the transfer must represent a genuine change in beneficial ownership and should take place before the eventual disposal.
The underlying gain does not disappear. The transfer changes who owns the asset and potentially how the eventual gain is taxed.
6. Selling Property Can Bring a 60 Day Deadline
Property owners need to be particularly careful with Capital Gains Tax reporting deadlines.
Where Capital Gains Tax is due on the disposal of most UK residential property, it generally needs to be reported and paid within 60 days of completion.
That is considerably earlier than the normal Self Assessment deadline.
The calculation should therefore be considered before completion wherever possible.
You will need to establish information such as:
- Original purchase price
- Acquisition costs
- Legal and professional fees
- Disposal costs
- Qualifying capital improvements
- Available reliefs
Normal repairs and maintenance will not generally reduce the gain in the same way as qualifying capital improvements.
HMRC provides further guidance on Capital Gains Tax when selling property.
7. Your Main Home Is Not Always Completely Exempt
Many people assume there is never Capital Gains Tax when selling their main home.
Private Residence Relief means this will often be true, but full relief is not automatic in every situation.
Your position may need closer attention if you have:
- Owned more than one home
- Let the property during your ownership
- Lived elsewhere for extended periods
- Used part of the property exclusively for business
- Owned significant land or grounds
- Changed how the property was occupied over time
Where a property has qualified as your main residence, the final nine months of ownership will generally qualify for Private Residence Relief even if you are no longer living there.
This is another area where checking the position before agreeing a sale can prevent surprises later.
Capital Gains Tax Also Applies Beyond Property
Property receives a lot of attention, but Capital Gains Tax can affect several other types of assets.
Shares and investments held outside tax exempt wrappers may be chargeable when sold. Shares held within an ISA do not create a Capital Gains Tax liability when disposed of.
Cryptoassets can also create taxable disposals.
Importantly, this is not limited to selling crypto for sterling. Exchanging one cryptoasset for another, using crypto to purchase goods or services, or gifting tokens to another person can potentially count as a disposal.
Certain valuable personal possessions can also fall within the Capital Gains Tax rules where their disposal value exceeds £6,000, including jewellery, paintings, antiques, coins, stamps and collections.
Do Not Forget Capital Losses and Available Reliefs
Before calculating a Capital Gains Tax bill, check whether you have previous allowable losses available.
Losses arising in the same tax year are generally offset against gains first, while unused losses from previous years may also be available.
Depending on the circumstances, reliefs could also significantly change the tax position.
These can include Private Residence Relief, Gift Hold Over Relief and Business Asset Disposal Relief.
For qualifying disposals from 6 April 2026, the Business Asset Disposal Relief rate is 18%, with the lifetime limit on qualifying gains remaining £1 million.
The important point is to establish whether relief is available before completing the transaction.
Check Your Capital Gains Tax Position Before Taking Action
The timing of a disposal can make a substantial difference.
As the report explains, the relevant Capital Gains Tax disposal date is not always the date money reaches your bank account. For many transactions involving an unconditional contract, the contract date determines the disposal date.
Before selling, gifting or transferring a significant asset, establish your original cost, current market value, allowable costs, previous losses, expected income, relevant reliefs and reporting requirements.
Capital Gains Tax should form part of the decision itself rather than being something you calculate once the transaction has already happened.
By then, many of the planning opportunities available beforehand may have disappeared.
Download the Full Report
If you are considering selling, gifting or transferring property, investments, business assets or another valuable asset, download our full Spotlight on Capital Gains Tax report.
It covers the 2026/27 Capital Gains Tax rates and allowance, property, gifts, spouses and civil partners, investments, cryptoassets, business reliefs, losses and the practical checks to make before completing a disposal.
FAQs
What is the CGT allowance for 2026/27?
Individuals have an annual exempt amount of £3,000 for 2026/27.
What are the CGT rates for 2026/27?
The main rates for individuals are 18% for gains falling within the available basic rate band and 24% for gains above it.
Do I pay CGT when giving an asset to my children?
Potentially. Gifts are generally treated as disposals at market value, meaning Capital Gains Tax can arise even if you receive no money.
How quickly do I need to report CGT on property?
Where Capital Gains Tax is due on most UK residential property disposals, it generally needs to be reported and paid within 60 days of completion.
Is my main home exempt from CGT?
Often, but not always. Private Residence Relief can provide full relief where the relevant conditions are met, but letting the property, owning multiple homes, business use and other circumstances can affect the position.
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Capital Gains Tax
