Last updated: 14 October 2026
What figures are used to calculate capital gains tax?
Capital gains tax (CGT) is based on your gain: the sale price (or market value, if you give the asset away or sell it to a connected person) minus what you paid for it, minus allowable costs of buying, improving and selling it. You then deduct any reliefs and losses, and the £3,000 annual exempt amount. The rest is taxed at 18% or 24% for 2026/27, depending on your income. Rates for Business Asset Disposal Relief are lower.
The figures you need
| Figure | What it includes |
| Disposal proceeds | The sale price, or market value for gifts and sales to connected people |
| Acquisition cost | What you paid, or market value if you were given or inherited the asset (probate value for inheritances) |
| Incidental costs of buying | Legal fees, stamp duty, surveyor and agent fees |
| Enhancement costs | Improvements that add value and are reflected in the asset when sold, such as an extension |
| Incidental costs of selling | Estate agent, legal and advertising fees |
| Reliefs | Private residence relief, Business Asset Disposal Relief, gift holdover relief, rollover relief |
| Losses | Current-year losses and brought-forward losses |
Repairs, maintenance, mortgage interest and insurance are not allowable for CGT, even on a rental property.
CGT rates for 2026/27
| Gain | Rate |
| Within your unused basic-rate band | 18% |
| Above the basic-rate band | 24% |
| Business Asset Disposal Relief (lifetime limit £1 million) | 18% from 6 April 2026 |
Trustees and personal representatives pay 24% on all gains, and they have a lower annual exempt amount.
Example
Priya sells shares for £45,000 that she bought for £18,000, paying £150 in dealing costs on each trade. Her gain is £45,000 − £18,000 − £300 = £26,700. After the £3,000 annual exempt amount, £23,700 is taxable. Her income uses up all but £5,000 of her basic-rate band, so £5,000 is taxed at 18% (£900) and £18,700 at 24% (£4,488). Her total CGT is £5,388.
Special rules for shares
For shares in the same company, you don’t match each sale with a specific purchase. Instead:
- Shares bought on the same day are matched first
2. Then shares bought in the next 30 days (“bed and breakfasting” rule)
3. Then the “section 104 pool”, using the average cost of all your other shares
Assets you received
If you inherited an asset, use the probate value. If someone gave it to you, use its market value at the date of the gift, unless holdover relief was claimed, in which case use the donor’s cost.
Reporting
UK residential property gains must be reported and paid within 60 days of completion. Other gains go on your Self Assessment return by 31 January after the end of the tax year.
Frequently asked questions
Can I deduct mortgage interest?
No, it’s not allowable for CGT.
What if I have a loss?
Report it within 4 years so you can use it later.
Is the annual exemption per person?
Yes. Spouses each have £3,000.
Do I use the sale date or completion date?
For CGT, the date of the unconditional contract (exchange) is usually the disposal date.
Related: CGT on a property sale and reducing CGT on a buy-to-let.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with working out capital gains tax. See our capital gains tax accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
