How is UK income tax calculated?

UK income tax is calculated using PAYE bands: 0% on the personal allowance (12,570), 20% basic rate (12,571-50,270), 40% higher rate (50,271-125,140), and 45% additional rate above 125,140 for 2025/26.

How much stamp duty will I pay?

Stamp duty in England depends on the property price and whether you are a first-time buyer. First-time buyers pay 0% up to 425,000. Standard rates start at 0% up to 250,000, then 5% up to 925,000.

How much is National Insurance in the UK?

Employee National Insurance is charged at 8% on earnings between 12,570 and 50,270, and 2% above that threshold for 2025/26.

Capital Gains Tax Explained — 2025/26

Updated for the 2025/26 tax year

Capital Gains Tax (CGT) is charged on the profit you make when you sell (or “dispose of”) an asset that has increased in value. It applies to shares, property (not your main home), cryptocurrency, and other valuable assets.

CGT Rates for 2025/26

Asset Type	Basic Rate	Higher/Additional Rate
Residential property	18%	24%
Shares, crypto, other assets	10%	20%
Business Asset Disposal Relief	10% on first £1m lifetime

Annual Exempt Amount

For 2025/26, the annual exempt amount is £3,000. This means the first £3,000 of gains each year are tax-free. This has dropped significantly — it was £12,300 as recently as 2022/23.

How CGT Is Calculated

Your gains are added on top of your taxable income to determine which rate band applies. If your taxable income is £40,000, you have £10,270 of basic-rate band remaining (£50,270 − £40,000). Gains up to that amount are taxed at the lower rate; anything above at the higher rate.

Worked Example: Selling Shares at a Profit

Scenario: Higher-rate taxpayer selling shares

Bought shares for: £15,000
Sold shares for: £35,000
Dealing costs (buy + sell): £200
Gain: £35,000 − £15,000 − £200 = £19,800
Annual exempt amount: −£3,000
Taxable gain: £16,800
CGT at 20% (higher rate): £16,800 × 20% = £3,360

If a basic-rate taxpayer with room in the basic band, the same gain would cost £16,800 × 10% = £1,680.

Bed and Breakfast Rule

You cannot sell shares and rebuy the same shares within 30 daysto crystallise a gain or loss. If you do, HMRC matches the sale to the repurchase (the “30-day rule”). This prevents artificial loss harvesting.

Workaround: Buy a similar (but not identical) fund, or have your spouse buy the same shares instead.

Spouse & Civil Partner Transfers

Transfers between spouses and civil partners are CGT-free. This is powerful for tax planning:

Transfer assets to a lower-earning spouse to use their lower CGT rate.
Double up the annual exempt amount (£3,000 each = £6,000 total).
Transfer to a non-taxpaying spouse for potential 0% CGT (if gains fall within the personal allowance and basic band).

Reducing Your CGT Bill

Use your £3,000 annual exempt amount every year — sell in tranches.
Offset capital losses against gains (carry forward indefinitely).
Use ISAs — gains inside ISAs are completely CGT-free.
Contribute to pensions instead of taxable investments.
Claim Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) — 10% rate on up to £1m of qualifying gains.

Reporting & Payment

Report gains via Self Assessment (31 January deadline).
Property disposals must be reported within 60 days via the CGT property disposal service, with tax paid upfront.
You must report if total proceeds exceed 4 × the annual exempt amount (£12,000) even if no tax is due.