Capital Gains Tax Explained
Capital Gains Tax (CGT) can apply when you sell or dispose of an asset that has increased in value. The tax is generally on the gain, not the full sale proceeds.
Introduction
CGT can affect individuals, landlords, investors, business owners and shareholders — especially on property, shares or valuable assets.
This guide covers when CGT may apply, records to keep, property and business contexts, mistakes to avoid and how to get help.
When does Capital Gains Tax apply?
CGT may apply when you dispose of assets such as:
- a rental property
- a second home
- shares
- business assets
- cryptocurrency
- valuable personal possessions
- land
- inherited assets sold later
A disposal includes selling, gifting, transferring or exchanging an asset.
What records do you need?
Retain:
- purchase price
- sale price
- purchase costs
- sale costs
- improvement costs
- ownership dates
- professional fees
- valuations
- evidence of private residence periods
- previous tax relief claims
Historic detail often drives the calculation — incomplete files are a common pain point.
CGT on property
Selling UK residential property can create reporting and payment obligations. Landlords and investors should prepare completion statements, legal and agent fees, improvement invoices and ownership history early.
CGT for business owners
Disposing of shares, business property or other business assets may trigger CGT. Reliefs can apply in some circumstances but depend on facts — plan before exchanging contracts where possible.
Common CGT mistakes
Assuming reinvestment defers all tax, omitting improvement costs, forgetting professional fees, missing reliefs or deadlines, or using incorrect historic purchase figures.
How DepoTax can help
DepoTax can help calculate gains, review records, identify allowable costs, prepare CGT reporting and support landlords through disposals.
Frequently asked questionsFAQ
When can Capital Gains Tax apply?
Broadly when you dispose of an asset that has gained in value — sales, gifts, transfers or exchanges of property, shares, crypto, business assets and similar.
What records are important?
Acquisition and disposal proceeds, fees, improvements, ownership dates, valuations and relief claims — historic detail often drives the calculation.
Is CGT only on residential property?
No — many asset types can be within scope; UK residential disposals may have tight reporting windows, so prepare early.
Can DepoTax help?
Yes — calculations, record reviews, return reporting and landlord or investor disposals.
Related DepoTax services
Contact DepoTax for tailored advice.