Quick Summary
- CGT rates are the same across the UK — 18% for Basic-rate taxpayers, 24% for Higher-rate taxpayers, on shares and residential property alike
- Annual exempt amount is £3,000 — down from £6,000 in 2023/24 and £12,300 in 2022/23, making tax-efficient wrappers more important than ever
- Scotland's lower Higher-rate threshold does NOT change your CGT — the band that decides 18% vs 24% is the UK-wide £50,270 limit, not Scotland's £43,663. Income between the two is taxed at 42% Scottish income tax, but gains stacked on top of it can still qualify for 18% CGT
- Use our free calculator — the Capital Gains Tax Scotland Calculator works out your exact bill from your income, gain, and asset type
Capital Gains Tax is not devolved to Scotland — HMRC administers it and the rates are identical across the UK. The common misconception runs in both directions: some Scottish taxpayers assume Scotland's lower Higher-rate threshold pushes them into 24% CGT sooner (it doesn't — CGT uses the UK band), while others assume the interaction gives them an advantage (it doesn't either — the CGT bill is identical to an English taxpayer's on the same numbers).
Quick Answer: Scottish taxpayers pay CGT at 18% (Basic rate) or 24% (Higher rate) — the same rates and the same thresholds as England. The band that decides which rate applies is the UK-wide basic rate limit of £50,270, not Scotland's £43,663 Higher-rate threshold. So a Scottish taxpayer on £45,000 pays 42% income tax on part of their salary, but gains on top of it still use the lower 18% CGT rate up to £50,270 — exactly as they would in England. The annual tax-free allowance is £3,000 for 2026/27. Use our Capital Gains Tax Scotland Calculator to check your bill.
CGT rates for 2026/27
| Asset type | Basic-rate taxpayers | Higher-rate taxpayers |
|---|---|---|
| Most assets (shares, funds, personal possessions) | 18% | 24% |
| Residential property (not your main home) | 18% | 24% |
| Carried interest | 32% | 32% |
These rates are the same whether you live in Scotland, England, Wales, or Northern Ireland. CGT is a reserved tax — the Scottish Parliament has no power to change it. The rates on shares and funds rose from 10%/20% to match property's 18%/24% on 30 October 2024, so the property/shares distinction no longer changes the rate — only the reporting deadline (below).
The £3,000 annual exempt amount
Everyone gets a tax-free CGT allowance of £3,000 per year. This has been slashed from £12,300 just a few years ago:
| Tax year | Annual exempt amount |
|---|---|
| 2022/23 | £12,300 |
| 2023/24 | £6,000 |
| 2024/25 | £3,000 |
| 2026/27 | £3,000 |
The dramatic reduction makes ISAs and pensions much more important for sheltering investment growth from CGT.
How your Scottish tax band affects CGT
Here's the part that catches people out. Your CGT rate depends on whether your gains, stacked on top of your taxable income, fit inside the basic rate band — and for CGT that band is always the UK-wide one: £12,571 to £50,270, regardless of Scottish income tax bands.
That creates a zone Scottish taxpayers should understand. Scotland's Higher rate starts at £43,663; the UK basic rate band runs to £50,270. Income between the two is taxed at Scotland's 42% Higher rate — but gains falling in that zone still qualify for the 18% basic CGT rate, not 24%. Your Scottish income tax band never decides your CGT rate.
Worked example: £45,000 salary, £20,000 capital gain
Step 1: Taxable income = £45,000 - £12,570 (PA) = £32,430
Step 2: Basic rate band remaining = £50,270 - £12,570 - £32,430 = £5,270
Step 3: Gain after exempt amount = £20,000 - £3,000 = £17,000
Step 4: First £5,270 of gain taxed at 18% = £948.60. Remaining £11,730 at 24% = £2,815.20
Total CGT = £3,764
This calculation is identical whether you live in Scotland or England — an English taxpayer with the same salary and gain pays the same £3,764.
The practical Scotland difference
While the CGT calculation itself uses UK-wide bands, Scottish taxpayers face a higher overall tax burden at the same salary level. A Scottish taxpayer earning £48,000 pays £8,142 in income tax, against £7,086 for an English taxpayer on the same salary — a gap of £1,056, because Scotland's 42% Higher rate has already kicked in at £43,663 while the English taxpayer is still in the 20% Basic band.
If both also have a £10,000 capital gain, they pay identical CGT. The Scottish taxpayer's total tax burden is higher, but only because of income tax — which makes tax-efficient investing more urgent, not the CGT rules different. (Our Scotland vs England Tax Calculator shows the cross-border gap at any salary level.)
Try it yourself
Calculate your exact CGT bill at 2026/27 rates — enter your gain, income, and asset type.
Open Scottish Capital Gains Tax CalculatorNo sign-up required.
When you pay CGT
You owe CGT when you dispose of an asset — sell it, give it away, swap it, or receive compensation for it. Common triggers:
- Selling shares or funds outside an ISA or pension
- Selling a buy-to-let or second property
- Selling a business
- Gifting an asset to anyone other than your spouse or civil partner — a gift is a disposal at market value even though no money changes hands
What's exempt from CGT
- Your main home (Principal Private Residence relief — see below)
- ISA and pension investments
- Personal possessions worth under £6,000 each
- UK government bonds (gilts)
- Gifts to your spouse or civil partner
- Gains up to the £3,000 annual exempt amount
Shares and investments: the matching rules
Gains on shares and funds held outside an ISA or pension use the 18%/24% rates. When you've bought the same share at different times and prices, the share matching rules decide which purchase you're treated as selling:
- Shares bought on the same day as the sale
- Shares bought in the 30 days after the sale (the anti-bed-and-breakfast rule)
- The pooled average cost of everything else (the Section 104 pool)
The 30-day rule is why you can't sell shares to crystallise a gain and immediately buy them back in the same account — but you can repurchase inside an ISA ("bed and ISA"), because ISA purchases sit outside the matching rules. Gains inside a Stocks and Shares ISA are completely exempt, which is why maximising the £20,000 annual ISA allowance is the primary way to shelter investment gains.
Your main home: PPR and lettings relief
If you sell your main home, the gain is usually fully exempt under Principal Private Residence (PPR) relief. The rules are UK-wide:
- You must have lived in the property as your only or main residence for the period you're claiming
- The last 9 months of ownership always count as your main residence, even if you've moved out
- Some periods of absence can still qualify (working away, for example)
Lettings relief is largely gone. It previously gave up to £40,000 of exemption when a former main residence was let out; it now applies only where the owner lived in the property at the same time as the tenant — a lodger arrangement. If you lived in a flat, moved out, and let it, the letting period's share of the gain is taxed at 18%/24%, with the gain apportioned between the PPR-qualifying and letting periods.
Agricultural and business assets: what's NOT exempt from CGT
A common misconception among Scottish farming families is that Agricultural Property Relief (APR) and Business Property Relief (BPR) cover Capital Gains Tax. They don't — APR and BPR apply only to Inheritance Tax. If you sell farmland, business premises, or other business assets during your lifetime, CGT applies at the standard 18% or 24% rates.
Rollover relief for business assets
If you sell a qualifying business asset and reinvest the proceeds in a new business asset, you can defer the CGT through rollover relief. This is particularly relevant for Scottish farmers restructuring their holdings — for example, selling one parcel of farmland and buying another. The gain is "rolled over" into the new asset's base cost, deferring the tax until the replacement asset is eventually sold.
Qualifying assets include land and buildings used for trade, fixed plant and machinery, and goodwill (for disposals before 2019).
Business Asset Disposal Relief (BADR)
If you sell all or part of a qualifying business, BADR gives a reduced flat CGT rate of 18% on the first £1 million of qualifying lifetime gains (the rate was 14% in 2025/26 and 10% before April 2025 — it has been stepped up twice). This applies to sole traders, business partners, and directors selling shares in their trading company. The differential over the standard 24% Higher rate is narrower than it once was, but BADR still saves £60,000 of CGT on a £1 million gain.
The interaction with IHT planning
From April 2026, the new £2.5M cap on APR/BPR for IHT is prompting many Scottish landowners to consider lifetime transfers of agricultural property. Be aware that lifetime transfers can trigger CGT — even gifts are treated as disposals at market value. Holdover relief may be available for gifts of business assets, deferring the CGT until the recipient sells. Careful planning with both IHT and CGT in mind is essential.
CGT on property for Scottish taxpayers
If you sell a residential property that isn't your main home — a buy-to-let, second home, or inherited property — you pay CGT at 18% or 24%.
Important: You must report and pay CGT on UK residential property sales within 60 days of completion, through HMRC's UK Property Reporting Service. This is different from other assets, where CGT is reported through your Self Assessment tax return.
What increases the base cost (reducing your gain)
- Purchase price
- LBTT paid on purchase — including ADS. A Scottish landlord who paid 8% ADS on top of standard LBTT can be adding five figures to the base cost; see our ADS refund guide for how ADS works
- Legal fees on purchase and sale, survey fees, estate agent fees on sale
- Capital improvements — an extension or loft conversion, not repairs or maintenance
Mortgage interest, routine repairs, and factoring fees do not reduce the gain — they're revenue expenses, deductible against rental income instead.
Worked example: selling a Scottish buy-to-let
- Purchase price: £180,000
- Sale price: £230,000
- Capital gain: £50,000
- Deduct improvement costs (new kitchen): £8,000
- Deduct selling costs (legal, estate agent): £4,000
- Net gain: £38,000
- Deduct annual exempt amount: £3,000
- Taxable gain: £35,000
If you're a Higher-rate Scottish taxpayer (most BTL landlords are, once rental income is added to employment income):
- CGT at 24%: £8,400
You'd report and pay this within 60 days of the sale via HMRC's online service. (Any LBTT and ADS paid on the original purchase would reduce the gain further — it belongs in the base cost.)
Gifting property and incorporation
Gifting a property to a family member is a disposal at market value for CGT — a Scottish parent gifting a flat to an adult child is taxed on the gain as if they'd sold it, even though no cash changed hands. The exception is spouses and civil partners: transfers between them are at no gain/no loss, deferring CGT until the recipient eventually sells.
The same market-value rule applies when a landlord transfers property into a limited company — CGT is charged on the transfer itself, which is one of the key costs of incorporation. See Limited Company vs Personal BTL Scotland.
Strategies to reduce CGT
Use your annual exempt amount every year
If you hold investments outside an ISA, sell enough each year to crystallise £3,000 of gains tax-free. Then repurchase inside your ISA ("bed and ISA"). Over time, this shifts your portfolio inside the tax-free wrapper.
Transfer to your spouse before selling
Transfers between spouses are CGT-free. If one partner is a Basic-rate taxpayer and the other is Higher-rate, transfer the asset to the lower earner before selling to pay 18% instead of 24%. Jointly-held assets also use both partners' £3,000 exempt amounts — £6,000 of tax-free gains a year between you.
Offset losses against gains
Capital losses are set against gains in the same tax year, and the excess carries forward indefinitely — but a carried-forward loss must be claimed within 4 years of the end of the tax year it arose in, via your Self Assessment return. Don't assume HMRC will pick a loss up automatically; unclaimed losses lapse.
Use pension contributions to reduce your income
If a capital gain would push you above the £50,270 band limit, a pension contribution extends your basic rate band — potentially keeping more of the gain at 18%. For a Scottish taxpayer with £45,000 income facing a £30,000 gain, a £10,000 contribution can shift a meaningful slice of the gain from 24% to 18%. This works in the same tax year as the gain.
Time disposals across tax years
If a large gain is inevitable, consider splitting the disposal across two tax years — two annual exempt amounts and two years of basic-rate band. This is often practical with land sales or staged business disposals.
Try it yourself
Work out whether your gain falls in the 18% or 24% band — and how pension contributions can reduce your CGT rate.
Open Scottish Capital Gains Tax CalculatorNo sign-up required.
Reporting and payment deadlines
| Asset type | Reporting deadline | Payment deadline |
|---|---|---|
| UK residential property | 60 days after completion | 60 days after completion |
| All other assets | 31 January after the tax year | 31 January after the tax year |
Property CGT must be reported and paid quickly — miss the 60-day deadline and you'll face penalties and interest, and the deadline applies even where losses or the exempt amount ultimately reduce the bill. Use HMRC's "Report and pay Capital Gains Tax on UK property" service online.
For other assets (shares, funds, etc.), report through your Self Assessment tax return. If you don't normally complete Self Assessment, you'll need to register with HMRC. Property gains reported in the 60-day window still go on the return too — it reconciles gains, losses, exempt amounts, and CGT already paid.
Frequently Asked Questions
How much is Capital Gains Tax in Scotland?
18% for Basic-rate taxpayers, 24% for Higher-rate, above the £3,000 annual exempt amount. CGT isn't devolved, so both the rates and the band threshold are identical across the UK — the 18%/24% boundary is the UK-wide £50,270 limit, not Scotland's £43,663 income tax threshold, so a Scottish taxpayer pays exactly the same CGT as an English taxpayer with the same income and gain.
Does Scotland set its own CGT rates?
No. Capital Gains Tax is reserved to the UK Government. The rates (18% and 24%) are identical whether you live in Scotland, England, Wales, or Northern Ireland. Scotland's devolved tax powers cover income tax and LBTT — not CGT, inheritance tax, corporation tax, or VAT.
Do I pay CGT when I sell my home?
No — your main residence is exempt from CGT through Principal Private Residence (PPR) relief. This applies automatically if the property has been your only or main home throughout ownership. If you've let part of it or been away for periods, partial relief may apply.
Can I offset my CGT losses against my income tax?
Generally no — capital losses can only be set against capital gains, not income. The exception is losses on shares in qualifying trading companies (under EIS or SEIS), which can be offset against income tax.
My spouse and I both have £3,000 CGT allowances — can we use both?
Yes. Each person has their own £3,000 annual exempt amount. If you jointly own an asset, each of you can use your allowance against your share of the gain. You can also transfer assets between spouses CGT-free before selling to make best use of both allowances.
What if I make a capital gain and a capital loss in the same year?
Losses are automatically offset against gains in the same year. If you have £15,000 of gains and £8,000 of losses, your net gain is £7,000 — after the £3,000 exempt amount you'd pay CGT on £4,000. If losses exceed gains, the excess carries forward, but you must claim it on your Self Assessment return within 4 years of the end of the tax year it arose in.
I'm not UK resident — do I still pay CGT on my Scottish property?
Yes. Non-UK residents pay UK CGT on gains from UK property (residential and commercial) under the Non-Resident CGT rules, regardless of where they live. The UK-wide rules apply; Scottish residency is irrelevant here.
My employer gave me shares — how does CGT work when I sell them?
Employment-related shares are usually charged to income tax when you acquire them (through PAYE). For CGT, your base cost is typically the market value that was charged to income tax at acquisition — only growth above that value is a capital gain, taxed at 18%/24% when you sell.
Further reading on investing and gains
Capital gains come from investing well over time — these are two of the clearest UK-friendly guides.
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Related Articles
- Tax-Efficient Investing in Scotland — ISAs, pensions, and VCTs to shelter from CGT
- Stocks & Shares ISA Guide — invest CGT-free inside an ISA
- Buy-to-Let Tax Scotland — CGT on property plus LBTT and income tax
- Limited Company vs Personal BTL Scotland — CGT on incorporation
- ADS Refund Guide — LBTT and ADS as part of your base cost
- Scottish Self Assessment Guide — reporting CGT through Self Assessment
- Tax on Selling Collectibles — the £6,000 chattels exemption and when selling Pokémon cards, coins, or antiques triggers CGT
- Buy-to-Let Calculator — model rental yields, Section 24, and CGT on disposal
- ISA vs SIPP Calculator — compare the two main CGT-free wrappers
This article is for informational purposes only and does not constitute financial, tax, or legal advice. Tax rates and thresholds can change — always verify current rates with Revenue Scotland, HMRC, or mygov.scot, and speak to a qualified financial adviser for advice specific to your circumstances.
Sources: HMRC — Capital Gains Tax rates, HMRC — CGT annual exempt amount, HMRC — Report and pay CGT on property, HMRC — CGT for married couples