Capital gains tax (CGT) applies on the disposal of certain assets such as shares, property (but not your own home if you have always lived there), or valuable personal possessions (worth more than ÂŁ6k) if sold at a profit.
It is calculated on the difference between the selling price of the asset and its original purchase price, but relief may be available to mitigate the tax liability. If you are liable to capital gains tax, you will also be eligible for an annual tax-free allowance.
Selling a business can often generates a substantial capital gain. Business Asset Disposal Relief (BADR) may be available to reduce that gain. BADR reduces the capital gains tax payable to 10% on up to £ 1 million of qualifying gains made during an individual’s lifetime.
Broadly BADR is available to individuals who are actively involved in a business (whether a personally owned business or a business owned through a partnership or company). There are various conditions which have to be satisfied and it is important to seek professional advice when you dispose of a business.
If you sell shares which do not relate to a business you own you may be liable for capital gains tax. Various reliefs may be available, including investors relief, which has a lifetime limit of ÂŁ10 million.
The sale of properties can be complex when it comes to capital gains tax, and will depend on factors such as whether the property is or was your home at any point and whether the property was bought as an investment or development. Various reliefs are available. There are also strict requirements on how to report the gains arising from the sale of property, which includes property sold by non-UK residents. We have significant experience in dealing with all of these issues.
Capital gains tax can be even more complex in certain specific circumstances, for example where you have only sold part of an asset i.e half of a piece of land, where there is a compulsory purchase order (CPO), where assets have been gifted, or where assets are disposed of to a trust (in which case specific reliefs may apply).
Particular complexity also arises in the case of non-resident capital gains tax where you dispose of assets whilst overseas and specialist advice should be sought.
We were approached by a client who was in the process of selling their farmhouse together with over 250 acres of agricultural land.
Our client wanted to understand the Capital Gain resulting from this sale and any subsequent compliance requirements. Our client was familiar with Private Residence Relief (PRR) but wasn’t sure to what extent this would be applicable to the house and land sale, given the size of the plot.
We worked through the information provided by our client to determine applicable costs for the calculations and to calculate the Capital Gains Tax due.
This was complicated by the fact the client was retaining part of the property (a cottage) and also we were not provided with the original cost allocation for the land and farmhouse. We also needed to ensure any calculations were sufficiently backed up to evidence to HMRC in the event of an enquiry on how we arrived at the numbers we did.
The client was confident that they had claimed and maximised any reliefs available to them, as well as being comfortable that they were aware of any reporting requirements and deadlines.
CGT applies when you sell or dispose of certain assets-like property, shares, or valuable possessions-and make a profit. Your main home is usually exempt if you’ve lived in it throughout, but other properties and investments may trigger a CGT liability.
Yes, but you may qualify for Business Asset Disposal Relief (BADR), which reduces the CGT rate to 14% (increasing to 18% from 6 April 2026) on up to £1 million of qualifying gains. Conditions apply, so it’s important to get advice before selling.
CGT on shares is calculated based on the profit you make from selling them. Reliefs like Investors’ Relief may apply, especially if you’ve held unlisted shares for a certain period. We help assess what you owe and identify any reliefs you can claim.
It depends on whether the property was your home, a buy-to-let, or an investment. There are strict reporting deadlines and specific rules for UK and non-UK residents. We guide you through the entire process to ensure you're compliant and tax-efficient.
Yes. Non-residents face specific rules when disposing of UK property or assets. There can also be complexities when selling only part of an asset, gifting assets, or disposing into a trust. We provide specialist advice for these situations to avoid costly errors.
