UK Capital Gains Tax on Investments: Rates, Rules, and Strategies
Capital gains tax (CGT) applies when you sell an investment for more than you paid for it. Whether you are selling stocks, crypto, or property, understanding how CGT works helps you keep more of your profits and avoid surprises at tax time.
Current CGT Rates (2026/27)
The UK has different CGT rates depending on the type of asset and your income tax band. Here are the current rates:
| Asset Type | Basic Rate (up to £37,700) | Higher/Additional Rate |
|---|---|---|
| Stocks, ETFs, crypto, and most assets | 18% | 24% |
| Residential property (not your main home) | 18% | 24% |
| Business Asset Disposal Relief (qualifying) | 10% on first £1m of lifetime gains | |
Annual Exempt Amount
The first £3,000 of capital gains each tax year is tax-free. This was reduced from £6,000 in 2023/24 and £12,300 before that. The lower threshold means more investors now need to think about CGT planning. Use our capital gains tax calculator to estimate your liability.
How CGT Is Calculated
The basic calculation is straightforward: sale price minus purchase price minus allowable costs equals your gain. Allowable costs include broker fees, stamp duty, and professional fees directly related to the purchase or sale.
Where it gets complex is determining your cost basis when you have bought the same asset multiple times at different prices. HMRC uses the “share pooling” method for shares and securities: all your holdings of the same share are pooled together, and the cost basis is the average price across all purchases.
There are two exceptions to share pooling. The “same day” rule matches sales with purchases made on the same day. The “bed and breakfast” rule matches sales with purchases made within the following 30 days. Both rules exist to prevent people from selling and immediately rebuying to crystallise a loss. A stock profit calculator can help you estimate the gain on individual trades.
CGT on Different Asset Types
Stocks and ETFs
Selling shares triggers CGT on the gain, while dividends are taxed separately under dividend tax rules. Shares held in an ISA or pension are exempt. For shares held outside tax wrappers, every sale is a potential CGT event.
Tracking your cost basis accurately is essential. If you have been buying the same stock over several years through regular investments, your pooled cost basis changes with every purchase. A portfolio tracker with capital flow tracking maintains this automatically.
Cryptocurrency
HMRC treats crypto as a taxable asset, not currency. Every disposal is a potential CGT event. Disposals include selling crypto for fiat, swapping one crypto for another, spending crypto to buy goods or services, and gifting crypto (except to your spouse or civil partner).
The same share pooling rules apply to crypto as to shares. If you bought Bitcoin five times at different prices, your cost basis is the pooled average. The 30-day bed and breakfast rule also applies. Given the frequency of crypto trading, accurate crypto portfolio tracking is critical for CGT compliance.
Property
Your main residence is exempt from CGT under Private Residence Relief. But second homes, buy-to-let properties, and land are all subject to CGT on disposal. Property gains must be reported to HMRC within 60 days of completion, and any tax owed must be paid within the same period.
Allowable costs for property include purchase costs (solicitor fees, stamp duty), improvement costs (extensions and renovations, but not maintenance), and selling costs (estate agent fees, solicitor fees). Keeping records of these costs reduces your taxable gain.
Strategies to Reduce Your CGT Bill
Use Your Annual Exempt Amount
The £3,000 exemption resets every tax year and cannot be carried forward. If you have gains to realise, spreading sales across tax years lets you use multiple years of exemptions. Selling £3,000 of gains each April is more tax-efficient than selling £15,000 in one go.
Offset Losses Against Gains
If you hold investments that are currently at a loss, selling them crystallises the loss, which can offset gains elsewhere. You can carry forward unused losses indefinitely. Just be aware of the 30-day bed and breakfast rule if you plan to rebuy the same asset.
Use ISA and Pension Wrappers
Investments held within an ISA or pension are completely exempt from CGT. Moving future investments into tax wrappers prevents CGT from accumulating. For existing holdings outside wrappers, you can sell and rebuy within an ISA (known as “Bed and ISA”), though this crystallises any gain on the sale. See our pension vs ISA comparison for help deciding which wrapper to use.
Transfer to Spouse or Civil Partner
Transfers between spouses and civil partners are CGT-free. If one partner has unused annual exempt amount or is in a lower tax band, transferring assets before sale can reduce the overall CGT bill. Each person gets their own £3,000 exemption.
Why Accurate Tracking Matters for CGT
CGT calculations depend entirely on accurate cost basis data. If you cannot prove what you paid for an asset, HMRC may assume a zero cost basis, meaning your entire sale proceeds are treated as gain. This is especially problematic for crypto investors who trade frequently across multiple exchanges.
A portfolio tracker with capital flow tracking records every purchase, sale, and transfer with dates and amounts. This gives you the transaction history you need for accurate CGT reporting and means you are not scrambling to reconstruct records at tax time.
Frequently Asked Questions
How much capital gains tax do I pay on stocks in the UK?
For the 2026/27 tax year, you pay 18% on gains within the basic-rate band and 24% on gains in the higher-rate band. The first £3,000 of gains each year is tax-free (the annual exempt amount). Your CGT rate depends on your total taxable income plus gains for the year.
Do I pay capital gains tax on crypto in the UK?
Yes. HMRC treats cryptocurrency as a taxable asset. Selling crypto, swapping one crypto for another, and spending crypto to buy goods or services are all disposals that can trigger CGT. The same rates and annual exempt amount apply as for stocks.
How do I report capital gains to HMRC?
If your total gains exceed the annual exempt amount (£3,000), you must report them via Self Assessment. For property disposals, you must report and pay within 60 days of completion. For other assets, you report on your tax return for the relevant tax year.
Can I offset capital losses against gains?
Yes. Capital losses reduce your taxable gains. You can offset losses from the same tax year first, then carry forward unused losses to future years indefinitely. You must report losses to HMRC within four years to carry them forward.
Does selling within an ISA trigger capital gains tax?
No. Investments held within an ISA wrapper are completely exempt from capital gains tax. This is one of the key advantages of ISAs. You can buy and sell freely without any CGT liability.
Track Your Gains and Losses Accurately
EptaWealth records every transaction as a capital flow, giving you the data you need for accurate CGT calculations across stocks, crypto, and more.
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