Capital Gains Tax in brief
Who this guide is for: For investors and savers who need the overview of when Capital Gains Tax can apply outside tax wrappers — and how it differs from Income Tax.
Capital Gains Tax (CGT) can apply when you dispose of an asset that has increased in value — for example shares, funds or property not covered by relief.
You work out the gain, deduct allowable losses and the Annual Exempt Amount, then apply the CGT rates for that tax year. Property-specific rules and deadlines are covered in Capital Gains Tax on Property.
Typical investor workflow
- Step 1Identify disposals
- Step 2Calculate gains and costs
- Step 3Offset losses
- Step 4Subtract Annual Exempt Amount
- Step 5Report and pay
Where gains usually arise
| Asset / wrapper | Typical Capital Gains Tax position |
|---|---|
| Stocks and Shares ISA | Gains inside the ISA normally tax-free |
| Shares / funds outside ISA | Chargeable gains may arise on disposal |
| Investment property | Often chargeable — see Capital Gains Tax on Property |
| Main home (full Private Residence Relief) | Often fully relieved — check GOV.UK exceptions |
ISAs and shelters
Holding investments in an ISA can remove Capital Gains Tax on gains inside the wrapper. That is why allowance planning and ISA subscriptions matter for long-term investors — see ISA Guide and ISA Allowances Explained.
For how losses reduce gains, read Capital Losses Explained. More investing tax guides live in the investing hub.
Estimate Capital Gains Tax on a disposal Use the Capital Gains Tax Calculator