Capital Gains Tax

GOV.UK's guidance states the basic principle plainly: “Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value.” As the guidance puts it, “It’s the gain you make that’s taxed, not the amount of money you receive”, and disposing of an asset is not limited to selling it outright — it also covers “giving it away as a gift, or transferring it to someone else”, swapping it for something else, or receiving compensation such as an insurance payout when the asset is lost or destroyed.

For the 2026 to 2027 tax year, individuals have a tax-free allowance before Capital Gains Tax becomes due: GOV.UK confirms that “For the 2026 to 2027 tax year the allowance is £3,000, which leaves” the remaining gain chargeable. The rate charged above that allowance depends on the taxpayer's Income Tax position. A higher or additional rate Income Tax payer pays a flat rate on the whole gain, since “you’ll pay 24% on your gains from 6 April 2026.” A basic rate Income Tax payer instead splits across two rates depending on how the gain, once added to their taxable income, sits against the basic rate band: “you’ll pay 18% on your gains made from 6 April 2026” on the portion within the basic rate band, and “you’ll pay 24% on gains made from 6 April 2026” on anything above it.