UK Capital Gains Tax Guide 2025 — Rates, Annual Exemption, & Strategies

Capital Gains Tax (CGT) is levied when you sell an asset at a profit. Understanding CGT rates, the annual exemption, and planning strategies can save significant tax on investment gains.

Annual Exempt Amount

For 2025/26, the annual CGT exemption is £3,000. Gains below this are not taxed; gains above are taxed at your marginal rate.

Example: Sell shares for £10,000 profit

• Exempt: First £3,000
• Taxable gain: £10,000 – £3,000 = £7,000

CGT Rates 2025/26

Note: CGT rates differ from income tax rates; they're lower.

Qualifying Assets

Assets subject to CGT:

• Stocks & shares
• Investment property (not your main home)
• Cryptocurrency
• Antiques & collectibles
• Bonds & gilts

Assets exempt from CGT:

• Main residence (Principal Private Residence Relief)
• ISA holdings (tax-free wrapper)
• Premium Bonds
• Certain government bonds (gilts)
• Chattels worth £6,000 or under (antiques, jewelry)

Tax-Loss Harvesting

You can offset gains against losses within the same year. If losses exceed gains, you can carry forward to future years.

Strategy: Sell underperforming shares at a loss in December to offset gains realized earlier in the year.

Important: Wash-sale rule — in UK CGT, there's no "wash-sale" rule preventing immediate repurchase. You can sell and immediately buy back.

Planning Strategies

✓ Use annual exemption every year — Wasted exemption = lost opportunity ✓ Defer gains to next tax year — Sell in February, not March (spreads exemptions) ✓ Harvest losses — Realize losses to offset current/future gains ✓ Gift appreciated assets to spouse — Transfers don't trigger CGT; allows spouse to use their exemption ✓ Hold in ISA — New gains are always tax-free in ISA wrapper

Conclusion

With the £3,000 annual exemption and 10–20% rates, strategic planning can minimize CGT. Use tax-loss harvesting, defer gains when possible, and maximize ISA usage for long-term investments.