What are the top eight Capital Gains Tax reliefs you can claim?

Navigating CGT can feel overwhelming, but the good news is there are several reliefs and exemptions that can significantly reduce your bill. 

Have you sold a property, shares or another asset, and think you may have tax to pay? To find out, you will need to calculate your capital gain (like profit, but for capital items) and any CGT due on that gain. Here we look at eight of the most popular and useful CGT reliefs and exemption to help reduce your CGT bill, and all within the rules. 

What can I offset against the capital gain? 

You can offset certain allowable costs from the sale proceeds when calculating your capital gain. These deductions depend on the type of asset sold, and the specifics of the sale. Speak to an accountant for advice on your specific transaction. Deductions may include: 

• purchase price of the asset  
• stamp duty and legal fees 
• improvement costs (but not regular maintenance) 
• selling costs e.g. estate agent and solicitor fees 

In some circumstances you need to use the market value of the asset instead of the sale proceeds. This is usually when you have some kind of connection with the person you are transferring the asset to e.g. a connection between you and a company, making a gift, or transferring to a trust. 

What improvements can you deduct from a capital gain when selling a property? 

Residential landlord selling a property? 

Only capital improvements that enhance the asset’s value or extend its life are deductible from a capital gain. Revenue expenses are dealt with through your income tax bill – see our guide here. 

Examples of landlord’s capital improvements are: 

• adding an extension to a property 
• installing a new central heating system

Routine maintenance like painting or repairs cannot be claimed against a capital gain when you sell the property. 

What capital gains reliefs and exemptions should I think about? 

Here are the top eight reliefs and exemptions you need to consider. 

1. What is the annual exempt amount for capital gains? 

The annual exempt amount (AEA) is a tax-free allowance for capital gains. Everyone gets an AEA each year. For 2025/2026, it is £3,000.  

Use it or lose it within the tax year – you can’t carry forward any unused AEA to future tax years.  

If you are selling an asset than can be split into smaller bundles e.g. stocks or shares, planning the sales over two tax years can make double use of this exemption. 

Example: 

Jonathan holds 5,000 shares in Big Company plc and wants to sell them. He will make a gain of £5,000. 

If he sells the shares in March, he will use his £3,000 AEA and pay CGT on the remaining £2,000 gain.  

But if he sells 2,500 shares in March, and the remaining 2,500 shares after 6th April, he will be able to use £2,500 of his AEA for year 1 against the first sale of shares and £2,500 of his AEA for year 2 against the second bundle, wiping out any tax payable.   

2. What are spousal transfers? 

Spousal transfers are moving assets from one spouse to the other. Assets transferred between spouses or civil partners are considered to be no gain, no loss for capital gains purposes. This means there is no CGT to pay when the asset is transferred. This allows couples to: 

• share ownership of assets in the way that best suits them 
• utilise both CGT allowances, and 
• time disposals more tax-efficiently 

In a similar way to the example of Jonathan above, transferring half of the shares to his spouse or civil partner would also allow use of two AEAs. However, a spousal transfer means no need to delay the second disposal until a new tax year, which can be important e.g. if share prices could fall or a buyer will not wait. 

3. What is private residence relief? 

Private residence relief (PRR) is a relief against any capital gain you make when selling your main home. If the property you sell was your main home, you may not have to pay any CGT on gains made for the period you lived there, plus the final nine months of ownership.  

Speak to an accountant if you own multiple properties and have lived or plan to live in more than one of them. You can nominate which property is your main home for PRR purposes to get relief most of the time you have owned it. 

4. What is lettings relief? 

Lettings relief is a relief available for landlords who share occupancy of a property with their tenants. PRR will be restricted to the percentage of the property you occupied, and lettings relief applies only to the other proportion of the property. Before 2020 you could also claim lettings relief for a period where you let the property and did not live there. 

You can claim the lower of: 

• an amount equal to the PRR you claim on the property,  
• £40,000 in relief (£80,000 for couples who jointly own a property), or 
• the capital gain made during the letting period 

5. What is Business Asset Disposal Relief (BADR)? 

BADR is a relief for business owners on selling a substantial number of shares or assets of their personal company. 

Previously called Entrepreneurs' Relief, BADR allows qualifying business owners to pay a reduced CGT rate on gains up to a lifetime allowance. The current BADR rate is 14% (compared to the standard CGT rates of 18% or 24% on most assets) but this is due to increase to 18% for the 2026/2027 tax year. BADR was 10% on or before 5th April 2025. 

Conditions are strict and should be reviewed by an accountant before claiming BADR. 

For a sole trader or business partner they include owning the business for at least two years before disposal.  

For a limited company it must be a trading company, and you are an employee or office holder of the company holding at least 5% of the shares for two years. 

There are separate rules for shares bought through Enterprise Management Incentives (EMI), which is a type of employee share scheme. 

6. What is Gift Hold-Over Relief? 

Gift Hold-Over Relief may be available if you are giving away business assets or shares or selling them for less than market value. Normally if you give away assets for free or for less than they are worth, you might need to pay CGT as if you had sold the assets for market value. Gift Hold-Over Relief means that if you give away the assets for free you don’t pay CGT at all and, if you sell them at a reduced price, you use the actual proceeds to calculate your capital gain. 

You must be a sole trader, business partner or hold 5% or more of the shares in a limited company to claim Gift Hold-Over Relief (like the BADR conditions). 

When the person you transfer the asset to comes to sell it, they will pay CGT on their gain AND the gain you claimed Gift Hold-Over Relief against. 

Example: 

Paul gives shares in his company to Anne. He paid £10 for the shares, and they are now worth £50,000. He claims Gift Hold-Over Relief so does not need to pay CGT on the disposal. 

Anne later sells the shares for £100,000. Her capital gain is: 

£49,990 (Paul’s gain) 

+ £50,000 (her own gain) 

= £99,990 

7. What is Business Asset Rollover Relief? 

Business Asset Rollover Relief (BARR) applies when you dispose of a business asset and use to proceeds to buy a new business asset. BARR means that you postpone the capital gain until you sell the new asset. 

You must buy the new assets within three years of selling the old assets and the assets must be used in your business. There are more rules if you only partially reinvest the proceeds in new assets. 

8. What relief is available if I transfer employees shares into an ISA? 

If you have shares from a Save as you earn/ Sharesave scheme (SAYE) or a Share Incentive Plan (SIP) through your employer, you can transfer them to a stocks and shares ISA free of CGT. 

The current annual limit for a stocks and shares ISA is £20,000 (2025/2026). Talk to your SAYE or SIP administrator and your ISA provider to ensure you meet all the qualifying conditions to do so. 

Need some help making the most of these reliefs? 

Understanding these eight CGT reliefs can make a real difference to your tax bill. Get in touch with your local TaxAssist Accountant today for personalised CGT advice. Call us on 020 3859 0575 or use our contact form. 

Last updated 18 Aug 2025 | First published 18 Aug 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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