How do I report Capital Gains Tax in my Self Assessment?

This guide explains how to report Capital Gains Tax in your Self Assessment including calculating gains, entering figures correctly, using losses and understanding HMRC requirements.

At Towerstone, we provide specialist capital gains accountancy services for taxpayers completing returns. We have written this article to explain how to report gains correctly, helping you make informed decisions.

From experience, Capital Gains Tax is one of the areas of Self Assessment that causes the most confusion and anxiety. I see it every year. People are perfectly comfortable reporting salary, dividends, or even rental income, but the moment a property is sold, shares are disposed of, or cryptocurrency is cashed in, confidence drops sharply. In my opinion, this is not because Capital Gains Tax is inherently difficult, but because it is event driven, less frequent, and far less forgiving of assumptions.

In this article I am going to explain, clearly and practically, how you report Capital Gains Tax on your UK Self Assessment return. I will cover when you need to report gains, what needs to be calculated first, which sections of the return to complete, how allowances and losses fit in, and the mistakes I see time and time again in real cases. Everything here is grounded in current UK rules and day to day practice, particularly the guidance and expectations set by HM Revenue and Customs and the information published on GOV.UK.

This is intentionally detailed. In my opinion, Capital Gains Tax is not something you want to rush or guess, because once figures are submitted, correcting them can be slow and stressful.

First Things First: What Capital Gains Tax Actually Is

Capital Gains Tax is a tax on the profit you make when you dispose of an asset.

A disposal is wider than most people realise. It includes:

  • Selling an asset

  • Gifting an asset to someone other than your spouse or civil partner

  • Swapping one asset for another

  • Receiving compensation or insurance proceeds for an asset

From experience, the biggest mistake people make is assuming CGT only applies when cash hits their bank account. In reality, many disposals never involve cash at all.

Do I Need to Report Capital Gains at All?

Not everyone who disposes of an asset needs to complete the Capital Gains section of Self Assessment.

In general, you must report Capital Gains Tax if, in the tax year:

  • Your total gains exceed the annual CGT allowance

  • Your total proceeds from disposals exceed four times the annual CGT allowance

  • You have chargeable gains on residential property that are not fully covered by reliefs

  • You want to claim or carry forward capital losses

From experience, many people incorrectly assume that being below the allowance means no reporting is required. That is not always true.

Assets Commonly Caught by Capital Gains Tax

Before reporting anything, you need to be clear whether the asset falls within CGT at all.

Common examples include:

  • Shares and investment funds

  • Buy to let property

  • Second homes

  • Land

  • Cryptocurrency

  • Business assets

  • Valuable personal possessions worth over the threshold

Your main home is often exempt, but from experience, that exemption is frequently misunderstood or overestimated.

Step One: Identify All Disposals in the Tax Year

The first practical step is to identify every disposal that occurred in the tax year.

This sounds obvious, but from experience it is where many errors start.

You should review:

  • Sale contracts and completion statements

  • Investment platform statements

  • Crypto exchange histories

  • Gift transfers

  • Asset swaps or exchanges

In my opinion, missing a disposal at this stage is the most dangerous mistake, because HMRC often has partial information even if you do not.

Step Two: Work Out the Gain or Loss for Each Disposal

Capital Gains Tax is not based on what you received. It is based on the gain.

The basic calculation is:

  • Disposal proceeds

  • Less allowable costs

  • Equals gain or loss

Allowable costs usually include:

  • The purchase price

  • Legal and professional fees

  • Stamp Duty Land Tax

  • Enhancement costs, not repairs

  • Selling costs such as estate agent fees

From experience, people often overclaim repairs or underclaim acquisition costs, both of which cause problems later.

Special Rules for Certain Assets

Some assets have additional rules.

For example:

  • Shares and crypto use pooling rules

  • Property may involve Private Residence Relief

  • Gifts are treated as disposals at market value

In my opinion, this is where people should slow down, because these rules materially affect the numbers reported.

Step Three: Apply the Annual CGT Allowance

Each individual has an annual Capital Gains Tax allowance.

This allowance:

  • Applies to total gains across all assets

  • Cannot be transferred between spouses

  • Is used automatically against gains

From experience, one of the most common misunderstandings is assuming the allowance applies per asset. It does not.

Step Four: Offset Any Capital Losses

Losses are just as important as gains.

You can:

  • Offset losses against gains in the same tax year

  • Carry forward unused losses to future years

From experience, many people forget to report losses in years where there is no tax to pay, which means those losses are not available later when they would be extremely valuable.

In my opinion, reporting losses is just as important as reporting gains.

Step Five: Calculate the Tax Due

Once you have your taxable gain, the tax rate depends on:

  • Your income level

  • The type of asset disposed of

For most assets:

  • Basic rate taxpayers pay CGT at 10 percent

  • Higher and additional rate taxpayers pay CGT at 20 percent

For residential property:

  • Rates are generally 18 percent and 28 percent

Your income uses up tax bands first, and any remaining basic rate band can be used for gains at the lower CGT rate.

From experience, this interaction between income and gains is one of the most commonly misunderstood areas.

Where Capital Gains Go on the Self Assessment Return

Capital Gains Tax is reported in the Capital Gains section of the Self Assessment return.

This section asks for:

  • Total proceeds from disposals

  • Total allowable costs

  • Total gains

  • Total losses

  • Losses brought forward

  • Gains chargeable to tax

You do not normally list every single transaction in the main return, but you must have full calculations available if HMRC asks.

Reporting Property Gains Separately

If you have sold UK residential property, there may also be a requirement to report the gain within 60 days of completion.

However, that does not remove the need to include the gain on your Self Assessment return as well.

From experience, people often assume the 60 day report replaces Self Assessment reporting. It does not.

What Supporting Information You Need to Keep

HMRC expects you to keep records for at least five years after the submission deadline.

These should include:

  • Purchase and sale documents

  • Legal completion statements

  • Valuation evidence

  • Invoices for allowable costs

  • Calculations of gains and losses

In my opinion, good records are the single best defence against HMRC enquiries.

Capital Gains and Jointly Owned Assets

If you own an asset jointly, each owner reports their own share of the gain.

This means:

  • Each person uses their own allowance

  • Each person applies their own tax rate

  • Each person reports on their own Self Assessment

From experience, confusion here often leads to one spouse reporting the full gain incorrectly.

Capital Gains and Spouse Transfers

Transfers between spouses or civil partners living together are usually no gain, no loss.

That means:

  • No CGT is reported at the time of transfer

  • The gain is deferred to when the asset is sold

However, once sold, each spouse must report their share correctly.

From experience, timing is critical, and transfers must occur before disposal.

Common Errors I See in Practice

Over the years, the same mistakes come up repeatedly.

These include:

  • Forgetting that gifts can trigger CGT

  • Reporting proceeds instead of gains

  • Ignoring losses

  • Using the wrong tax year

  • Misunderstanding reliefs

  • Failing to report disposals under the allowance when required

In my opinion, most of these errors come from rushing or assuming CGT works like income tax.

What Happens If I Get It Wrong?

If you make an honest mistake, HMRC will usually allow you to amend your return.

However:

  • Interest may apply on underpaid tax

  • Penalties may apply if HMRC believes care was not taken

  • Enquiries can be time consuming and stressful

From experience, HMRC is far more sympathetic to proactive corrections than to silence.

Amending a Self Assessment Return

You can usually amend your Self Assessment return online within a set time window.

If the window has passed, a disclosure may be required.

In my opinion, if you discover an error, it is always better to correct it voluntarily rather than wait for HMRC to raise it.

When Professional Help Is Sensible

In my opinion, professional help is worth considering where:

  • Property has been sold

  • Crypto or complex investments are involved

  • Large gains arise

  • Reliefs are being claimed

  • Losses from multiple years are involved

From experience, the cost of advice is usually far lower than the cost of getting it wrong.

Practical Step by Step Summary

From experience, this is the cleanest way to approach CGT reporting:

  • Identify every disposal in the tax year

  • Calculate gains or losses accurately

  • Apply the annual allowance

  • Offset any losses

  • Work out the correct tax rate

  • Complete the Capital Gains section of Self Assessment

  • Keep all supporting records

Breaking it down this way removes most of the stress.

The Emotional Side of Capital Gains Reporting

It is worth saying this plainly.

Many people delay CGT reporting because they are worried about the size of the tax bill. From experience, that delay often makes things worse, not better.

In my opinion, clarity reduces anxiety. Once the numbers are known and correctly reported, people can plan properly rather than worry.

Key Takeaways

So how do you report Capital Gains Tax in your Self Assessment? By identifying disposals carefully, calculating gains accurately, applying allowances and losses correctly, and completing the Capital Gains section with confidence and evidence.

From experience, Capital Gains Tax is rarely about trickery or loopholes. It is about process, timing, and accuracy. People who take a structured approach almost always find it far more manageable than they expected.

If there is one takeaway, it is this: Capital Gains Tax is not optional, but panic is. With the right preparation and understanding, reporting CGT on your Self Assessment can be done cleanly, confidently, and without unnecessary stress.

If you would like to explore related Capital Gains Tax guidance, you may find what is capital gains tax and how much is capital gains tax useful. For broader Capital Gains Tax guidance, visit our Capital Gains Tax hub.