How much money do you have to have before you pay capital gains tax?

When Do You Pay Capital Gains Tax in the UK?

If you’ve sold an asset—like property, shares, or even a valuable painting—you might be wondering when capital gains tax (CGT) kicks in. The good news is, you don’t pay tax on every pound you make. Everyone in the UK benefits from an annual exempt amount, a tax-free allowance that lets you make a certain amount of profit before CGT applies.

For the current tax year (2023/24), that allowance is £6,000. That means if your total capital gains for the year are £6,000 or less, you won’t owe any tax. But be aware—this threshold has been dropping. From the 2024/25 tax year onward, it’s set to fall to just £3,000. So, what counted as tax-free just a couple of years ago might not be in the near future.

To put it simply: you only pay capital gains tax on profits above your annual exempt amount. For example, if you made £8,000 from selling shares in 2023/24, you’d only pay CGT on £2,000—the amount exceeding the £6,000 threshold.

It’s also worth noting that this allowance is separate from your income tax personal allowance. Different rates apply depending on your income and the type of asset sold—ranging from 10% to 28% for most people.

And looking ahead? From April 6, 2026, the rules may shift again, so it’s wise to keep an eye on updates. Planning ahead—especially if you’re considering a major sale—can help you make the most of your tax-free allowance before it shrinks further.