How much can I earn before paying CGT?

The annual CGT allowance for 2024/25 is £3,000. This means the first £3,000 of capital gains each tax year are tax-free. The allowance was reduced from £6,000 in 2023/24 and £12,300 in 2022/23.

Do I pay CGT on ISA investments?

No. All gains within an ISA are completely exempt from CGT. This is one of the key benefits of using ISA wrappers for your investments.

When do I need to report CGT?

You must report and pay CGT through self-assessment if your total gains exceed the annual allowance, or if total proceeds from disposals exceed four times the allowance (£12,000). Property sales must be reported within 60 days.

Can I carry forward unused CGT allowance?

No. Unlike pension allowances, the CGT annual exemption cannot be carried forward to future tax years. Use it or lose it each tax year.

Do I pay CGT on cryptocurrency?

Yes. HMRC treats cryptocurrency as an asset subject to CGT. Each disposal (sale, swap, or use for purchases) is a taxable event. The same rates and allowances apply as for other assets.

How can I legally reduce my CGT bill?

Use your annual allowance, invest through ISAs and pensions, harvest losses to offset gains, transfer assets to your spouse, consider timing of disposals across tax years, and look into EIS/SEIS for CGT deferral.

Capital Gains Tax on Investments: UK Guide

What Is Capital Gains Tax?

Capital Gains Tax (CGT) is a tax on the profit you make when you sell (or dispose of) an asset that has increased in value. For investors, this primarily applies to shares, funds, cryptocurrency, and property (other than your main home).

You only pay CGT on the gain — the difference between what you paid for the asset and what you sold it for, after deducting allowable costs.

Current CGT Rates (2024/25)

Following the Autumn Budget 2024 changes:

Basic-rate taxpayers: 18% on all assets (previously 10% on non-property assets)
Higher/additional-rate taxpayers: 24% on all assets (previously 20% on non-property assets)

The annual tax-free allowance is £3,000 — a significant reduction from £12,300 just two years ago.

What Counts as a Disposal?

A disposal is not just a sale. CGT applies when you:

Sell shares, funds, or other investments
Give assets away (market value is used)
Swap one asset for another (including crypto-to-crypto trades)
Receive compensation or insurance payouts for an asset

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CGT-Free Disposals

The following are exempt from CGT:

Gains within an ISA or pension
Your primary residence (main home)
Transfers between spouses or civil partners
Gains below the annual exemption (£3,000)
Gilts (UK government bonds) and qualifying corporate bonds
Personal possessions worth £6,000 or less

Strategies to Reduce Your CGT Bill

1. Use Your ISA and Pension Allowances

The most effective CGT strategy is prevention. Investments held within ISAs and pensions are completely exempt. Prioritise these tax wrappers for your highest-growth investments.

2. Harvest Capital Losses

Losses from selling investments below their purchase price can be offset against gains. You can carry forward unused losses indefinitely. Some investors deliberately crystallise losses near the tax year end to reduce their CGT bill.

3. Use Spousal Transfers

Transfers between spouses are CGT-free. If one spouse has used their annual allowance but the other has not, transfer assets before selling to utilise both allowances — potentially saving up to £720 per year.

4. Bed and ISA

Sell investments outside an ISA (using your annual exemption) and repurchase them within your ISA. Future gains are then permanently sheltered from CGT.

5. Time Your Disposals

Spread large sales across two tax years to utilise two annual allowances. If selling near 5 April, consider splitting the transaction.

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Reporting and Payment

You must report CGT through self-assessment if your total taxable gains exceed £3,000 or your total disposal proceeds exceed £12,000. For UK residential property, gains must be reported and paid within 60 days of completion.

For shares and other assets, CGT is due by 31 January following the end of the tax year (e.g., gains in 2024/25 must be paid by 31 January 2026).