Capital gains tax
Capital gains tax is charged when an individual sells an asset for more than it cost — including shares in their own company. Rates are 18% and 24%, after an annual exempt amount of £3,000.
Also known as: CGT
How it works
Individuals pay capital gains tax on the profit from disposing of assets: shares, property other than a main home, business assets and crypto. Companies do not — a company's gains are chargeable gains inside its corporation tax computation instead.
For 2026/27 the annual exempt amount is £3,000. Gains above it are taxed at 18% to the extent they fall in your remaining basic rate band, and 24% above it. Residential property carries the same headline rates but has its own 60-day reporting and payment deadline, which is separate from self assessment.
For company owners the moment that matters is exit. Selling shares in a trading company, or extracting reserves through a members' voluntary liquidation, is a capital event and may qualify for Business Asset Disposal Relief at 18% up to the £1,000,000 lifetime limit. Closing a company informally by strike-off only gives capital treatment on distributions up to £25,000; above that, the whole amount is taxed as a dividend.
Losses are set against gains of the same year first, then carried forward if claimed. Transfers between spouses and civil partners are on a no gain, no loss basis, which is the simplest way to use two annual exemptions.
Who this affects
- Founders selling shares in their company
- Directors closing a solvent company and extracting reserves
- Landlords selling property held personally, with 60-day reporting
- Anyone with investments or crypto gains above £3,000
Common mistakes
- Missing the 60-day deadline on UK residential property disposals
- Assuming a strike-off gives capital treatment above £25,000
- Not claiming losses within the time limit so they cannot be carried forward
- Overlooking Business Asset Disposal Relief conditions until after the sale
Frequently asked questions
What are the capital gains tax rates?
18% within your remaining basic rate band and 24% above it, after the £3,000 annual exempt amount.
Do companies pay capital gains tax?
No. Company gains are included in taxable profit and charged to corporation tax instead.
When do I report a gain?
Through self assessment by 31 January after the tax year, except UK residential property, which must be reported and paid within 60 days of completion.
Can I reduce the tax when selling my company?
Business Asset Disposal Relief can reduce the rate to 18% on qualifying gains, but the conditions must have been met for two years before the disposal.
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Reviewed by Waqas Sagar ACA FCCA FMAAT · Last reviewed 13 September 2026 · Figures for 2026/27 · About our practice
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