Capital Gain Tax – FAQs Q1. What is Capital Gains Tax and when do I have to pay it? Capital Gains Tax (CGT) is charged on the profit you make when you sell or dispose of an asset that has increased in value, such as a second home, investment property, shares, business interest, or crypto-asset. You pay tax on the gain, not the total sale proceeds. CGT applies after using your annual exempt amount, currently £3,000 for individuals in 2025/26, and rates depend on the asset type and your overall income. Q2. What are the current Capital Gains Tax rates in the UK? For most assets, basic-rate taxpayers pay CGT at 18% and higher and additional-rate taxpayers pay 24% on gains made from 30 October 2024 onwards. Residential property attracts the same 18% and 24% rates. Business Asset Disposal Relief reduces the rate to 14% on qualifying business gains in 2025/26, rising to 18% from April 2026. Trustees and personal representatives generally pay at the higher 24% rate, with limited reliefs available. Q3. Do I need to report a property sale within 60 days? Yes. If you sell a UK residential property and have a CGT bill to pay, you must file a UK Property Disposal return and pay the estimated tax within 60 days of completion. This applies to second homes, buy-to-let properties, and any property that has not been your main residence throughout ownership. Missing the deadline triggers penalties and interest. Atlas Tax Advisors handles 60-day returns regularly for clients across Milton Keynes and the wider UK. Q4. Do I pay CGT when I sell my main home? Generally no, thanks to Private Residence Relief (PRR), which fully exempts the gain on a property that has been your only or main residence throughout ownership. However, partial CGT can apply if you have let the property out, used part of it exclusively for business, owned more than one home, or the grounds exceed the permitted area. The rules are nuanced, so it is worth checking with us before you assume a sale is fully tax-free. Q5. How is Capital Gains Tax calculated on shares? You calculate the gain by subtracting the original cost (plus acquisition costs and any allowable expenses) from the sale proceeds. Shares of the same class in the same company are pooled under the section 104 rule and matched in a specific order set by HMRC. Reliefs like the share-for-share exchange, EIS, SEIS, and rollover relief can reduce or defer the gain. We can model the figures to make sure no relief is overlooked. Q6. What is Business Asset Disposal Relief and who qualifies? Business Asset Disposal Relief (formerly Entrepreneurs' Relief) reduces the CGT rate to 14% in 2025/26 on qualifying gains up to a £1 million lifetime limit. To qualify, you generally need to have owned the business or held at least 5% of shares and voting rights for two years, and to have been an officer or employee. The relief is highly valuable but easy to lose by accident through restructuring, so professional advice well before any sale is critical. Q7. Can I reduce my CGT bill by transferring assets to my spouse? Yes, transfers between spouses or civil partners are generally exempt from CGT, which means you can move assets to use both annual exempt amounts and ensure the lower-rate taxpayer takes the gain. With the annual exempt amount now just £3,000 per person, this kind of planning has become much more important. Timing and proper legal documentation matter, so speak to us before transferring assets to make sure the exemption applies cleanly. Q8. Do I pay Capital Gains Tax on cryptocurrency? Yes. HMRC treats most cryptocurrency activity by individuals as investment, so disposals such as selling for fiat currency, swapping one crypto for another, or using crypto to buy goods all create CGT events. Frequent or commercial activity may instead be treated as trading and taxed as income. Records of every transaction, including DeFi activity, must be kept. Atlas Tax Advisors helps clients reconcile messy crypto histories and report gains correctly to HMRC. Q9. What records do I need to keep for Capital Gains Tax? Keep purchase contracts, completion statements, sale agreements, broker statements, share certificates, improvement-cost invoices, and any documents relating to reliefs claimed. For property, retain solicitor letters, Stamp Duty receipts, and refurbishment invoices. HMRC can ask to see records up to six years after the relevant tax year, longer in some cases. Good records can be the difference between confidently claiming a relief and losing it through inability to prove the underlying figures. Q10. Can Atlas Tax Advisors help me plan disposals to minimise CGT? Yes, this is one of the highest-value areas we work in. We help clients spread disposals across tax years to use multiple annual exempt amounts, time gains and losses to offset each other, claim every available relief, and structure ownership efficiently between spouses or family members. Planning works best when you talk to us well before exchanging contracts, ideally at the point you start considering a sale, rather than after the deal is already done.