UK Capital Gains Tax on Investments: Rates, Rules, and Strategies

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:

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.