Capital Gains Tax
Learn disposals, allowable costs, gains and losses, exemptions, reliefs and reporting routes.
Capital Gains Tax explained
Capital Gains Tax is generally concerned with the gain arising when an asset is disposed of, not the amount of cash received. The calculation starts with disposal proceeds and allowable acquisition/disposal costs, then considers losses, the annual exempt amount and any available reliefs.
This learning path covers UK rules and ReturnDeck’s UK form set. Check the effective period and official source before using a rule for a live filing.
Learn it in stages
Beginner · What counts as a disposal
A sale is the obvious disposal, but gifts, exchanges and some compensation events can also be disposals. Identify the asset, acquisition date/cost, disposal date/proceeds and whether market-value rules or special rules may apply.
Intermediate · Calculate the gain
Start with proceeds, deduct allowable acquisition and disposal costs and qualifying enhancement expenditure, then apply relevant losses and reliefs in the proper sequence. Personal expenditure and routine maintenance are not automatically enhancement costs.
Advanced · Rates, reliefs and interactions
The rate can depend on the taxpayer and nature of the disposal. Learn the interaction with taxable income, losses, the annual exempt amount and reliefs such as Business Asset Disposal Relief where the statutory conditions are met.
Reporting · Self Assessment and property routes
Capital gains can feed into SA108 and the wider Self Assessment calculation. Some UK property disposals have separate reporting/payment requirements, so do not assume the annual return is always the first or only reporting event.
Example: share disposal
An investor sells shares for more than their allowable acquisition cost and incurs dealing fees. Calculate proceeds less allowable costs, account for any available capital losses and annual exempt amount, then determine the rate by reference to the taxpayer’s wider taxable-income position. Finally map the figures to the appropriate capital-gains reporting fields.
Apply this in Practice Mode →Common mistakes to avoid
- Calculating tax on sale proceeds instead of the gain
- Losing acquisition or improvement evidence
- Treating every property cost as an allowable enhancement
- Forgetting brought-forward or current-year losses
- Missing a separate property reporting deadline where it applies
Records and preparation checklist
Before calculating or filing, assemble the evidence that supports the position. This makes the return easier to complete and easier to explain later.
- Purchase contract and acquisition costs
- Sale contract and disposal costs
- Enhancement expenditure evidence
- Valuations where market value is required
- Capital loss records
- Relief eligibility and reporting route
Key terms
An event that can trigger a capital-gains calculation, such as a sale or gift.
A cost permitted in calculating the gain under the CGT rules.
A loss on a disposal that may be available against gains subject to the rules.
A statutory provision that can reduce, defer or otherwise change the gain/tax where conditions are met.
Follow the lesson into the form
ReturnDeck’s 1,139 mapped UK fields connect form codes to plain-English meaning, applicability, source figures, calculation notes, examples, common mistakes, interactions and HMRC sources.
Calculate and check
Use the related ReturnDeck calculator or checker to turn the lesson into a practical result where the verified rules support deterministic calculation.
Open related tool →Practice what you learned
Move from learning into a fictional case file, source documents, return completion, validation and a worked answer. Practice Mode never submits anything to HMRC.
Continue to practice →Official HMRC / GOV.UK sources
These are the primary official sources for this learning path. ReturnDeck summarises them for learning; the official material remains the authority.
Source set reviewed for ReturnDeck’s 2026 UK learning layer. Tax rules change; verify the effective date for a live decision.