Estimated reading time: 3 minutes
Introduction
If you sell or give away an asset that has increased in value, you may need to pay Capital Gains Tax (CGT). Capital Gains Tax is charged on the profit you make rather than the total amount you receive.
Key Points at a Glance
- Capital Gains Tax is charged on the gain, not the sale proceeds.
- You may pay CGT when you sell, give away or dispose of certain assets.
- Some assets are exempt from Capital Gains Tax.
- Business owners may qualify for certain tax reliefs.
- Some gains must be reported within specific HMRC deadlines.
What is Capital Gains Tax?
Capital Gains Tax applies when you make a profit from disposing of an asset that has increased in value.
- Selling an asset.
- Giving an asset away.
- Exchanging an asset.
- Receiving compensation for an asset.
Which Assets Can Be Taxable?
- Property that is not your main residence.
- Shares and investments outside tax-efficient wrappers.
- Business assets.
- Land.
- Valuable personal possessions above certain thresholds.
How is the Gain Calculated?
The gain is generally the difference between what you paid for the asset and what you received when disposing of it, after allowing for qualifying costs.
- Purchase costs.
- Selling costs.
- Improvement costs.
- Professional fees.
Capital Gains Tax for Business Owners
Business owners may pay Capital Gains Tax when disposing of qualifying business assets. Reliefs such as Business Asset Disposal Relief may be available where conditions are met.
Reporting and Paying Capital Gains Tax
Reporting deadlines depend on the type of asset disposed of. UK residential property gains requiring tax to be paid are generally reported within 60 days, while many other gains are reported through Self Assessment.
Keeping Accurate Records
- Purchase price.
- Improvement costs.
- Selling costs.
- Legal and professional fees.
- Dates of acquisition and disposal.
How We Can Help
We can calculate your gains, identify available reliefs, advise before you dispose of assets and prepare the necessary HMRC submissions.
Further Reading (HMRC)
- Capital Gains Tax – https://www.gov.uk/capital-gains-tax
- Reporting and Paying Capital Gains Tax – https://www.gov.uk/capital-gains-tax/reporting-and-paying-capital-gains-tax
- Capital Gains Tax for Businesses – https://www.gov.uk/capital-gains-tax-businesses
- Business Asset Disposal Relief – https://www.gov.uk/business-asset-disposal-relief
- Tax when you sell shares – https://www.gov.uk/tax-sell-shares
Disclaimer
This article is intended as general guidance only and is based on HMRC and GOV.UK guidance available at the time of writing. Tax legislation and HMRC guidance may change, and individual circumstances differ. Please contact us if you require advice specific to your situation.
Last reviewed: July 2026
