Capital Taxes
Understanding Tax on Assets, Gifts and Inheritance
Capital taxes can affect what happens when you sell an asset, give it away or pass wealth to the next generation. Two key areas are Capital Gains Tax and Inheritance Tax.
The same decision can have consequences for more than one tax. This guide introduces the main points and explains why planning before a transaction matters.
2026/27 information checked: 16 October 2026.
Capital Gains Tax
Capital Gains Tax (CGT) can arise when you dispose of an asset that has increased in value. It is the gain, rather than the full proceeds, that is considered. Disposals can include sales, gifts, transfers and exchanges.
For 2026/27:
- The annual exempt amount is £3,000 for most individuals, applied to overall gains for the tax year.
- The main individual rates are 18% within the unused basic-rate band and 24% above it.
- Losses and qualifying reliefs may reduce the taxable amount.
Your income, asset type and circumstances affect the calculation. Special rules apply to some disposals; companies generally deal with chargeable gains through Corporation Tax.
Property and Reporting Deadlines
Private Residence Relief may cover all or part of a gain on your home, subject to its ownership and use. UK residents generally need to report and pay CGT due on UK residential property within 60 days of completion. Non-residents have wider UK property reporting obligations, including in some cases where no tax is due.
Inheritance Tax
Inheritance Tax (IHT) concerns a person’s estate on death and can also affect lifetime transfers. The standard nil-rate band is £325,000. The usual rate on the taxable estate above the available thresholds is 40%, subject to exemptions and reliefs.
A qualifying home left to direct descendants may attract an additional residence nil-rate band. Conditions and estate-value limits apply, so a higher tax-free threshold is not automatic. Transfers between spouses or civil partners and unused allowances can also affect the position.
Lifetime Gifts
Some gifts are covered by exemptions. Many outright gifts to individuals may fall outside IHT if the donor survives seven years, but this is not a rule that makes every gift tax-free. Gifts into trusts and gifts where the donor retains a benefit need particular care.
Giving an asset away can also trigger CGT. Consider both taxes before transferring property, shares or other assets, even where no payment is received.
Business Assets, Trusts and Succession
Business succession, trust arrangements and transfers of family assets can involve additional rules and conditions. Reliefs are not automatic. Advice should consider ownership, values, timing and the law applying to the transaction.
Keep Records and Plan Ahead
Keep acquisition details, valuations, relevant costs and a record of gifts. Discuss significant transactions before signing contracts or transferring ownership. Tax advice should sit alongside your legal arrangements and wider family or business plans.
This is general information. Your liability and reporting obligations depend on your circumstances and the rules in force at the relevant time.
Capital Tax Questions?
Speak to Merranti before a significant sale, gift or change in ownership.
- Asset disposals and capital gains
- Inheritance Tax considerations
- Lifetime gifts and family transfers
- Business succession planning
We can discuss your circumstances and agree the scope and fee for the advice you need.
Discuss capital taxesConsider Both Taxes
A decision that changes your IHT position may also have CGT consequences. Review the wider position before acting.
Keep the Evidence
Retain contracts, valuations, invoices and gift records. Clear information helps establish the facts behind the advice.
Plan With Your Advisers
Tax, legal ownership and your personal priorities need to work together. Involve the appropriate advisers before committing to a plan.
Official Guidance
Capital Gains Tax
Inheritance Tax
Lifetime gifts
Passing on a home
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Capital taxes information and support
Plan for what you sell, give and pass on.
Whether you are selling an asset, making a family gift or thinking about succession, start with a conversation. We can discuss the tax questions, identify the information needed and agree the next steps.
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