•  Capital Gains Tax

Capital Gains Tax UK 2025 — Everything You Need to Know Before Selling Property

Introduction

If you're planning to sell a second home, investment property, or asset in 2025, understanding Capital Gains Tax (CGT) in the UK is critical. Many property owners are unaware of how CGT applies to their sale — and the hidden costs involved. At Zuizz, we specialise in financial planning and tax advisory that helps UK residents legally reduce their CGT liability.

In this blog, we break down everything you need to know about CGT rules, rates, exemptions, and smart planning strategies to minimise your tax bill in 2025 and beyond.

What is Capital Gains Tax?

Capital Gains Tax is a levy on the profit when you sell (or 'dispose of') an asset that has increased in value. You're taxed on the gain, not the total sale price.

Assets subject to CGT include:

• Real estate (second homes, buy-to-let properties)
• Stocks and shares
• Personal possessions worth over £6,000 (e.g., art, antiques)
• Business assets

When Do You Pay Capital Gains Tax on Property?

You may need to pay CGT if:

• You’re selling a second home or rental property
• You inherited a property and are now selling it
• You’re a landlord, property developer, or investor
• You own a holiday home in the UK

If the property is your main residence, CGT may not apply due to Private Residence Relief, but only under certain conditions.

UK Capital Gains Tax Rates in 2025

The 2025/26 CGT rates for property are:

| Income Tax Band | Property CGT Rate | Other Assets | |-----------------|-------------------|--------------| | Basic Rate | 18% | 10% | | Higher Rate | 24% (reduced from 28%) | 20% |

Annual Tax-Free Allowance:
The Annual Exempt Amount in 2025 is £3,000 per person (down from £6,000 in 2024).
If you’re married, consider transferring ownership to your spouse to double the exemption to £6,000.

CGT Example for 2025

Sarah sells a buy-to-let flat in London for £400,000. She bought it for £250,000.

• Gain = £150,000
• Less CGT Allowance: £3,000
• Taxable Gain = £147,000

As a higher-rate taxpayer, Sarah pays:
24% of £147,000 = £35,280 CGT

How to Reduce or Avoid CGT

1. Private Residence Relief
   If the property was your main home at any point, a portion may be CGT-exempt.
2. Spousal Transfers
   Transfer property to a spouse in a lower tax bracket or to split the gain.
3. Offset Capital Losses
   Losses from other investments (e.g., stocks) can reduce your taxable gain.
4. Make Use of Allowances
   Sell before tax year end to use this year’s exemption, and again next year.

Reporting Deadlines & HMRC Penalties

• You must report and pay CGT on UK property within 60 days of the sale.
• Penalties for late reporting can exceed £3,000.
• Late interest is also applied.

Selling Smart in 2025

Navigating Capital Gains Tax in the UK can be complex — especially when selling property in 2025 under new rate changes and reduced allowances. Without the right strategy, you could lose a significant portion of your profits to tax.

At Zuizz, we specialise in helping property owners, investors, and landlords structure their sales efficiently and remain fully HMRC-compliant.

Book a free consultation with our tax experts today to:

• Maximise your available allowances
• Plan around deadlines
• Minimise CGT legally and effectively

Let Zuizz help you keep more of what you've earned.
Visit zuizz.co.uk to get started.