What capital gains tax applies to
Capital gains tax is charged on the profit you make when you dispose of an asset that has grown in value. It is the gain that is taxed, not the full sale price. The tax comes up most often with these assets:
- Property that is not your main home, such as a buy to let or a second home
- Shares held outside an ISA
- Cryptoassets
- Business assets, including shares in your own company
- Personal possessions worth £6,000 or more, apart from your car
How the gain and the tax are worked out
Start with the sale price and take off what you paid. You can then deduct estate agent and solicitor fees on the purchase and the sale, plus the cost of improvement work such as an extension. Routine decorating does not count. What is left is your gain.
For 2026/27 each person has a tax free annual exempt amount of £3,000. Gains above that are taxed at 18% if they fall within your basic rate band and 24% above it. Because the gain is added on top of your other income, the same sale can cost a nurse at Watford General Hospital less than a senior manager on a higher salary.
Giving something away can still count as a disposal. If you hand a rental flat to your son or daughter, the gain is normally worked out using the market value, even though no money changes hands. Gifts to a husband, wife or civil partner are different, as there is usually no capital gains tax on those.
What is included
- Gain calculations before and after a sale
- 60 day UK property returns
- Private residence relief calculations
- Advice on transfers between spouses
- Claiming and using capital losses
- Business Asset Disposal Relief checks
- Gains on shares and cryptoassets
- Reporting gains on your tax return
Capital gains tax advice in Watford before you sell
The best time to ask for capital gains tax advice is before you accept an offer. Once contracts are exchanged, most of the choices have gone. A short review beforehand can make a real difference to the bill.
Some of the things we look at are the timing of the sale, especially near the end of the tax year on 5/4, whether moving part of an asset to your spouse first lets you use two annual exempt amounts and two basic rate bands, and whether you have losses from earlier years. A loss has to be claimed within four years of the end of the tax year in which it happened, so old losses that were never reported may still be usable if you act in time.
Selling a home you used to live in
Your main home is usually free of capital gains tax through private residence relief. Trouble starts when a former home has been let. Say you lived in a house in Oxhey, moved to St Albans and let the old place for some years before selling. Relief covers the years you lived there plus the final nine months of ownership. The rest of the gain may be taxable.
Letting relief now only applies where you shared the home with your tenant, such as a lodger. Most people who moved out and let the whole property do not get it. Capital gains tax advice at this stage means we work out the split between taxable and exempt years, so you know the real figure before you sell.
The 60 day deadline on UK property
If you are a UK resident and sell a UK residential property with capital gains tax to pay, you must report the sale and pay the tax within 60 days of completion. This is separate from your normal tax return and much earlier than 31/1. Missing it can mean interest and a penalty.
People who live abroad must report every sale of UK property within 60 days, even if there is no tax to pay. We prepare the return as soon as completion figures are available, and then make sure the gain is shown correctly on your self assessment return as well.
Selling a business or company shares
If you are selling your trading business or shares in your own company, get capital gains tax advice early, because Business Asset Disposal Relief may apply. From 6/4/2026 it gives a capital gains tax rate of 18%, and the qualifying conditions generally have to be met for two years before the sale. Many owner managed businesses around Croxley Park and the Watford town centre would fit the profile, but the details matter, so we check the conditions well ahead of any deal.
Paperwork that makes the figures accurate
Good records can cut a bill. For a property we ask for the completion statements from when you bought and when you sold, invoices for any extension, loft conversion or other improvement, and the dates you lived there. For shares we need the purchase dates and prices, including any shares bought through a workplace scheme. If something is missing, we help you rebuild it from bank statements and old emails rather than guessing.
Who this suits
- Landlords selling a buy to let in Watford or nearby
- People selling a former home they later let
- Investors selling shares or cryptoassets
- Business owners planning a sale or retirement
- Families selling an inherited property
Common questions
Is there capital gains tax on shares I sell outside an ISA?
Yes, gains on shares held outside an ISA are taxable once your total gains for the year pass the £3,000 annual exempt amount. Shares inside an ISA are free of capital gains tax.
Can the cost of my extension reduce the gain on my rental house?
Yes. Improvement work that adds to the property, such as an extension, can be deducted when working out the gain. Keep the invoices, because general maintenance and decorating do not count.
My wife and I own a rental jointly. Do we both get the allowance?
Yes. Each person has their own £3,000 annual exempt amount and their own tax bands, and each of you pays tax on your share of the gain. Unused allowance cannot be carried forward to a later year.
What happens if I miss the 60 day deadline?
HMRC can charge interest and a penalty for reporting and paying late. If you have already missed it, report as soon as possible, because the longer it runs the worse it gets.
Can I split a sale across two tax years to use two allowances?
Not for a single asset. A sale happens on one date, which for capital gains tax is normally the date contracts are exchanged. If you own several assets, such as a portfolio of shares, selling some before 5/4 and the rest after it can use two years of allowances.
Do I pay capital gains tax when I sell my car?
No. Your private car is not subject to capital gains tax. Valuable possessions such as jewellery or art can be, if they are worth £6,000 or more.
We inherited Mum's house in Bushey. Is there tax when we sell?
Capital gains tax only applies to any rise in value after the date of death, measured from the value used for inheritance tax. If you sell fairly soon for close to that value, the gain may be small or nil. If the house is let or kept for years, the gain can grow.
How long do I have to claim a capital loss?
You have four years from the end of the tax year in which you made the loss. Once claimed, a loss can reduce gains in the same year or be carried forward to later years.