Guide To Capital Gains Tax In 2025

Capital Gains Tax (CGT) is an important consideration for property owners and investors alike, but another group of people that it’s incredibly important to is those who inherit a property. If you know you are likely to inherit a property one day or have recently inherited one, then CGT is something that needs to be on your radar.

Recent changes introduced in the 2024 UK budget mean that you should have a firm understanding before you embark on any property sales or changes. Whether you are selling a second home, disposing of valuable assets, or have inherited a loved one’s home, knowing how CGT works can help you plan in the best way possible while avoiding any unexpected tax bills! By the end of this guide, you’ll have a clear understanding of CGT and how to navigate it efficiently.

At Good Move, we help our customers sell properties quickly and entirely hassle-free. We pride ourselves on being able to streamline the sale of all properties, whatever the condition, and that includes those worried about CGT implications.

What is Capital Gains Tax?

Capital Gains Tax is a tax applied to the profit made when selling or disposing of an asset that has increased in value. Unlike income tax, which applies directly to your earnings, CGT is only due when you sell an asset for more than you originally paid for it. The tax is particularly relevant to property owners, investors, and those who have inherited a property from a friend or family member.

What’s the link between CGT and inheritance?

Don’t panic: when a person inherits a property, they do not immediately pay CGT. Instead, the first point of call is usually inheritance tax, especially is the property costs a particular (high) value. If the property isn’t sold immediately, then this is when CGT comes into play and will become a consideration. In these cases, CGT may apply to any increase in value from the date the property was inherited to the date of sale.

To determine CGT liability, you need to know two figures:
• The value of the property at the time of inheritance (base cost)
• The sale price of the property

The difference between the base cost and the sale price is the amount that is subject to CGT – this needs to be a fair and accurate estimation to ensure that the correct amount of tax is paid.

If you have inherited a property and want to avoid long waiting times and complicated taxation rules, selling to a cash house-buying company like Good Move can simplify the process. We help homeowners sell inherited properties quickly, removing the stress of dealing with estate agents, property chains, and more.

What is liable vs. what is exempt to CGT?

The relevant examples that are liable to CGT include:

• Second homes and buy-to-let properties
• Valuable personal possessions (e.g. art, jewellery) worth over £6,000
• Business assets

On the other side of the coin, the things exempt from CGT are:
• Primary places of residence
• Gifts to a spouse, civil partner, or charity
• Personal belongings under £6,000 in value

How much CGT will I owe?

If you’re trying to work out how CGT is calculated, then let us simplify it for you!

Say that you decide to purchase a second home for £200,000 but decide to sell that property, and it’s now worth £300,000. You’ll need to take off any ‘allowable costs’ which include the likes of legal fees, stamp duty etc. so in this case, let’s round that up to £10,000. The taxable gain in this instance would be £90,000 (£300,000 – £200,000 – £10,000), so this when moves over to what tax bracket the individual currently falls into, and the amount of CGT owed from this would depend on that.

The latest budget made some changes here. The ‘basic rate’ is currently* 18% on propertybut the ‘higher rate’ for those who earn more is 24% on property.

Example: A higher-rate taxpayer with a £50,000 property on property would have a £12,300 tax-free allowance, leaving £37,700 behind. 24% of this is £9,048 – that would be the amount liable for Capital Gains Tax.

Selling your property fast to avoid CGT problems

If you are looking to sell a property quickly to avoid the complexities of Capital Gains Tax, then Good Move offers a stress-free cash buying experience. Unlike traditional estate agents, we purchase properties directly, meaning no long waits, no hidden fees, and a guaranteed sale – often in as little as 14 days.

Enter the property’s postcode on the Good Move website today and receive a free valuation in just 24 hours, arming you with the information you need to move the process along speedily.

Working with us removes the potential risks associated with property market fluctuations and uncertainty, as delaying a sale could lead to unexpected tax increases or even a fallen-through sale.

*according to GOV information in February 2025.