Capital Gains Tax Rules for Spouses UK 2025 | Trueman Brown

spouses or civil partners living together without immediate CGT.

The cost base of the asset (i.e., what you originally paid, plus allowable costs) moves with the asset — so when the recipient spouse disposes of it, they will pick up your cost base.

This can be a powerful planning tool: if one spouse has used their annual exemption or is in a higher rate tax band, transferring to the other spouse (who has not) may reduce the eventual tax rate.

Key changes for 2025/26 – what couples need to note

There are a number of updates to the Capital Gains Tax rules for spouses UK that apply from the 2025/26 tax year:

• The annual exempt amount (often called the “CGT allowance”) for individuals is £3,000 for the 2025/26 tax year.

• The CGT rates for disposals made from 6 April 2025 are:

  • 18% for gains within the basic rate band when added to taxable income.

  • 24% for gains that fall above the basic rate band (for individuals).

• The same “no gain/no loss” rule for transfers between spouses or civil partners living together continues to apply.

• For separating couples: provided the transfer falls within the special window (typically up to three tax years after the end of the tax year in which you permanently separated, or where the transfer is part of a formal divorce agreement), the no gain/no loss treatment still applies under the Capital Gains Tax rules for spouses UK.

Practical planning considerations for couples

When deploying the Capital Gains Tax rules for spouses UK as a couple, consider the following:

• Check each spouse’s income tax band and use transfers to balance gains into the lower-rate spouse where possible.

• Use both spouses’ annual exemptions (each has £3,000) if assets are jointly held or transferred, effectively giving a couple access to £6,000 tax-free allowance.

• Make sure the transfer is “outright and unconditional” – if there are strings attached, HMRC may treat it as not being eligible for the no-gain/no-loss treatment.

• Record carefully the cost base (original purchase price + allowable costs) of any asset you transfer, because the recipient spouse inherits your cost base under the rules.

• In the event of separation, mark the date of separation and ensure any planning sits within the allowed period for no-gain/no-loss transfers. The Capital Gains Tax rules for spouses UK allow in many cases transfers up to three years after the end of the tax year in which you separated.

• Don’t forget other reliefs like private residence relief, losses carried forward, and that the rate you pay depends on your income plus gains.

How Trueman Brown can help you with Capital Gains Tax rules for spouses UK

At Trueman Brown, we specialise in helping married couples and civil partners apply the Capital Gains Tax rules for spouses UK ­— and ensure they fully exploit the available allowances and reliefs while remaining compliant. Whether you’re looking to transfer investment assets, second homes or shares, we’ll help you:

• Review your income tax bands and CGT position

• Structure transfers between spouses so you make the most of the no gain/no loss rule

• Ensure the assets are documented appropriately and records are in place

• Plan for separation or divorce scenarios and time matters correctly

• Prepare any required CGT computations and liaise with HMRC where needed

If you’d like to talk through your personal situation, please drop us an email at mark@truemanbrown.co.uk or call 01708 397262.

We’d be happy to help clarify how the Capital Gains Tax rules for spouses UK apply in your case and what you need to do for the 2025/26 tax year.

Frequently Asked Questions (FAQ) about Capital Gains Tax rules for spouses UK

Q1: If I transfer shares to my spouse, do we both lose our annual exemptions?
No. Under the Capital Gains Tax rules for spouses UK, transfers between spouses living together are treated on a no gain/no loss basis. Each spouse retains their own annual exemption (£3,000 for 2025/26). So, if one spouse transfers shares to the other, the recipient obtains the asset at the original cost base, and can use their own exemption when they later dispose.

Q2: Does the no gain/no loss rule apply if we are separated?
Possibly — if you separated but are within the permitted window. The Capital Gains Tax rules for spouses UK allow transfers at no gain/no loss up to three tax years after the end of the tax year in which you permanently separated — provided you weren’t living together. If the transfer forms part of a formal divorce or separation agreement, the period may be unlimited.

Q3: Will transferring an asset to my spouse reduce the CGT rate we pay?
Yes — potentially. Because each spouse has their own annual exemption and may be taxed in different income bands, transferring to the spouse in the lower tax bracket may mean a lower rate (18% instead of 24%) when they dispose. Proper planning under the Capital Gains Tax rules for spouses UK can deliver savings.

Q4: What if my spouse later sells the asset — how is their gain calculated?
If you transferred the asset to your spouse on a no gain/no loss basis, the recipient spouse takes on your cost base (what you paid plus allowable costs). When they later sell, their gain is calculated from that cost base, less any relevant expenses and reliefs. The Capital Gains Tax rules for spouses UK ensure continuity of cost base for this reason.

Q5: Are any transfers between spouses not eligible for no gain/no loss treatment?
Yes. The main situations where the no gain/no loss treatment may not apply under the Capital Gains Tax rules for spouses UK include:

• Transfers when you and your spouse/civil partner were not living together at any time in the tax year.

• Transfers where the spouse has acquired the asset for their business to sell on (i.e., stock in trade).

• Transfers made after the permitted window following separation or where the transfer is not part of a formal agreement (depending on timing).