Capital Gains

Criteria for Submitting a Self-Assessment Tax Return and Paying Tax on Capital Gains

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In the UK, you must submit a self-assessment tax return (including the Capital Gains Tax summary pages, form SA108) if you meet specific criteria related to disposals of chargeable assets during the tax year (6 April 2024 to 5 April 2025). Capital Gains Tax (CGT) is payable if your chargeable gains exceed the annual exempt amount (£3,000 for this tax year) after deducting allowable losses and reliefs. However, even if no tax is due (e.g., due to losses or the annual exempt amount covering your gains), you may still need to report if the criteria below apply.

Key criteria from the Capital Gains Tax summary notes (SA108 Notes 2024-25):

  • You sold or otherwise disposed of chargeable assets (e.g., property, shares, cryptoassets, antiques worth over £6,000) worth more than £50,000 in total.
  • Your chargeable gains (before deducting any losses) exceeded the annual exempt amount of £3,000.
  • You have gains from an earlier tax year that become taxable in this period (e.g., deferred gains from rollover relief on wasting assets, remitted foreign gains, or gains from temporary non-residence).
  • You want to claim an allowable capital loss for the year or make a capital gains claim or election (e.g., Private Residence Relief, Business Asset Disposal Relief, or negligible value claim).
  • You are not domiciled in the UK and are claiming to pay tax on foreign gains using the remittance basis.
  • You are chargeable on the remittance basis and have remitted foreign chargeable gains from an earlier year.
  • You made a direct or indirect disposal of the whole or part of an interest in UK property or land while non-resident, or while UK resident but in the overseas part of a split tax year.

You do not need to fill in the Capital Gains Tax summary pages or pay CGT on:

  • Private cars.
  • Personal possessions (chattels) worth up to £6,000 each (e.g., jewellery, paintings, antiques).
  • Stocks and shares in tax-free accounts (e.g., ISAs, PEPs).
  • UK Government securities (e.g., gilts, National Savings Certificates, Premium Bonds).
  • Your main home if you qualify for full Private Residence Relief.
  • Betting, lottery, or pools winnings.
  • Compensation for personal injury or mis-sold PPI.
  • Foreign currency bought for personal or family use outside the UK.

If you are UK resident and disposed of UK residential property, you may also need to report and pay CGT within 60 days via a Capital Gains Tax on UK Property return (separate from self-assessment), but include details in your self-assessment too.

Self-assessment filing deadlines: Paper returns by 31 October 2025; online by 31 January 2026. CGT is paid as part of your overall tax liability by these dates (or earlier for in-year reporting on UK residential property).

How to Calculate CGT Liability

CGT liability is calculated based on your chargeable gains minus allowable losses, reliefs, and the annual exempt amount. Gains are categorized by asset type (e.g., residential property, carried interest, cryptoassets, other assets, listed/unlisted shares) and taxed at different rates depending on your income tax band and the disposal date. The tax calculation summary notes (SA110 Notes 2024-25) provide a working sheet for overall tax, including CGT in Section 18 (pages TCSN 44-46). The Capital Gains Tax summary notes emphasize preparing computations for each disposal and manual adjustments for rate changes.

Step 1: Identify Chargeable Assets and Disposals

  • Assets: Include stocks/shares, property/land, business assets, goodwill, antiques >£6,000, cryptoassets.
  • Disposals: Selling, gifting, transferring, exchanging, insurance payouts for damaged assets, or negligible value claims (even if you still own the asset). Part-disposals count (e.g., selling half an interest).
  • For connected persons (e.g., relatives, business partners), use market value instead of actual proceeds, and losses are “clogged” (only usable against gains to the same person).
  • Exclusions: As listed above under criteria.

Step 2: Compute Gains/Losses for Each Disposal

Use the working sheet on page CGN 15 of the Capital Gains notes for simple cases (not for options, part-disposals, or aggregated gains/losses). For each asset:

  • Gain = Disposal proceeds – Allowable costs.
    • Proceeds: Cash received, market value (if gifted or to connected persons), or value of exchanged assets. Use market value if not arm’s length.
    • Allowable costs: Purchase price (or market value at 31 March 1982 if owned then), improvement costs (reflected in the asset at disposal), incidental costs (e.g., Stamp Duty, legal fees).
  • Deduct any reliefs/claims (e.g., Private Residence Relief – code PRR; Business Asset Disposal Relief – code BAD; use the table in the notes for codes, entered in boxes 8, 20, 28, or 36).
  • Aggregate gains by category (e.g., residential property in boxes 3-6; crypto in 13.1-13.8; other assets in 14-22; listed shares in 23-30; unlisted in 31-44).
  • Deduct current-year losses (boxes 45-49) and brought-forward losses (box 47). Losses must be claimed to be allowable (not from tax avoidance schemes).
  • Subtract the annual exempt amount (£3,000) from total chargeable gains.

If you have gains from earlier years (e.g., remitted foreign gains, deferred corporate bond gains), include them in the relevant category.

Step 3: Allocate Gains to Tax Bands and Apply Rates

From the tax calculation summary notes (Section 18 worksheet):

  • Start with taxable gains after losses and annual exempt amount (e.g., from SA108 boxes like 6 for residential gains, 52.1 for non-resident, etc.).
  • Add any life policy gains (if applicable) to taxable/annualized amounts.
  • Determine available basic rate band: This is the unused portion of your basic rate band (£37,700 for non-Scottish residents; Scottish bands differ) after allocating income (non-savings, savings, dividends). Any unused band is applied to gains.
  • Apply rates in order (carried interest first, then residential property, then other gains):
    • Business Asset Disposal/Investors’ Relief qualifying gains: 10% flat rate.
    • Carried interest: 18% on amount in basic rate band; 28% above.
    • Residential property and carried interest (unchanged rates): 18% in basic rate band; 24% in higher/additional rate bands.
    • Other gains (e.g., shares, crypto):
      • Up to 29 October 2024: 10% in basic rate band; 20% above.
      • From 30 October 2024: 18% in basic rate band; 24% above.
    • Manual adjustment: The automatic calculation doesn’t account for the rate increase from 30 October 2024; add extra liability in SA108 box 51.
  • Deduct Deficiency Relief (if applicable, from life policy terminations).
  • Add CGT adjustments (e.g., additional liability from trusts in box 52).
  • Subtract Foreign Tax Credit Relief (box 53a, limited to UK CGT due).
  • Subtract tax already paid (e.g., on non-resident CGT in box 52.4; Real Time Transaction gains in boxes 10+12+13.8+22+30+38).
  • Final CGT due = Revised CGT charged minus credits/payments (if overpaid, it’s repayable or non-repayable based on calculations).

Incorporate into overall tax liability (Section 11 of tax calculation worksheet): Add to Income Tax/NICs, then subtract payments on account.

For complex cases (e.g., remittance basis, non-residents), consult the notes or a adviser. Use the full working sheet in SA110 notes for integration with income tax.

Example (Simplified)

  • Disposal proceeds: £60,000.
  • Allowable costs: £40,000.
  • Gain: £20,000.
  • Deduct losses: £5,000 → Chargeable gain £15,000.
  • Deduct annual exempt: £3,000 → Taxable £12,000.
  • If other gain post-30 Oct 2024 and all in basic rate band: £12,000 × 18% = £2,160 due.

Checklist of Documents, Evidence, Receipts, Dates, Invoices, and Forms to Accompany a Tax Return Recording Capital Gains

When submitting your self-assessment tax return with CGT, attach (or upload online) supporting computations and evidence. Do not write “see attached” in form boxes—enter figures directly. From the Capital Gains Tax summary notes:

  • Computations/Working Sheets: Detailed calculations for each disposal (use CGN 15 sheet for simple ones; separate for each asset/type). Include gains/losses, proceeds, costs, reliefs/claims.
  • Valuations: Evidence of market value (e.g., professional valuation reports) if used instead of actual proceeds/costs (e.g., gifts, connected persons, assets owned pre-31 March 1982).
  • Purchase/Sale Documents: Contracts, deeds, or settlement statements showing acquisition/disposal dates and prices (essential for all disposals).
  • Receipts/Invoices for Allowable Costs: Proof of purchase price, improvement costs (e.g., builder invoices reflecting enhancements), incidental costs (e.g., legal/surveyor fees, Stamp Duty receipts).
  • Dates: Records of acquisition date, disposal date, and any relevant events (e.g., insurance claim dates, remittance dates for foreign gains).
  • Loss Records: Details of allowable losses claimed, including clogged losses from connected persons (keep separate records for carry-forward).
  • Relief/Claim Forms: Specified forms for claims/elections (e.g., negligible value claim form; codes like PRR/LET in box 54 with full details).
  • Prior Returns Evidence: Copies of Capital Gains Tax on UK Property or Real Time Transaction returns (include gains/losses in SA108; tax paid in adjustments).
  • Foreign Gains Evidence: Remittance proofs (e.g., bank statements) if on remittance basis.
  • Other: Crypto transaction logs; insurance payout statements; evidence for non-resident disposals (e.g., residency status docs).

Retain originals for 22 months (individuals) or 5 years (businesses) post-filing for audits. If claiming reliefs like Business Asset Disposal Relief, include eligibility proofs (e.g., business ownership docs).