For example, if you make a gain of £20,000 in 2025/26, you deduct the £3,000 allowance, leaving £17,000 taxable. Then you must apply the correct rates, depending on your existing taxable income.

Avoiding error: keep clear records of when the disposal occurred, ensure you apply the current tax year’s allowance (not an older, higher one), and check whether you have any brought-forward losses which can reduce the gain before the allowance is applied.

​2. Disposals of UK residential property

Another frequent source of Capital Gains Tax errors is on disposing of UK residential property.

The rules for residential property are more complex, and the reporting deadlines are tighter.

From 6 April 2020 onwards, if a UK resident disposes of a UK residential property and makes a chargeable gain, they must report the gain to HMRC within 60 days of completion and pay the tax due within that same 60-day window.

Errors often arise from assuming the normal self-assessment process applies, or forgetting to submit the separate property-gain return within 60 days. In addition, not applying reliefs correctly (see next sections) can lead to overpayment.

For 2025/26: the rates for residential property gains remain at 18% for basic rate taxpayers and 24% for higher rate taxpayers (for non-business disposals).

Tips: if you are selling your only or main residence, check whether Private Residence Relief (PRR) applies (see next). Meet the 60-day reporting deadline and ensure all reliefs and costs are captured.

3. Private residence relief – final period exemption

Mistakes around PRR form another set of common Capital Gains Tax errors.

If a property has been your only or main residence, PRR may exempt part of the gain.

One key area of confusion is the “final period exemption” – the period at the end of ownership for which relief applies whether or not you were living in the home.

Historically the final period was 18 months (pre-6 April 2020), but currently different periods apply (e.g., 9 months standard; 36 months if moving into care) and you must apply correctly.

In 2025/26 you must ensure you apply the correct final period figure and check eligibility criteria carefully. Overclaiming the final period can trigger errors, while under-claiming means over-paying tax.

Avoiding error: check your occupancy history, move-in/move-out dates, and determine whether you qualify for the longer final period exemption (36 months for those moving into care).

Make sure you only claim once, and ensure any letting or non-main residence periods are handled appropriately.

4. Lettings relief

Lettings relief is another area prone to Capital Gains Tax errors, especially given how its rules changed some time ago.

From 6 April 2020 the scope of Lettings Relief narrowed significantly: now it only applies where the owner lives in part of the property as their main residence and lets out part of it.

It no longer applies if the whole property has been let out.

Errors occur when taxpayers assume the older, broader rules still apply (i.e., prior to April 2020) or when they fail to correctly allocate the let part versus the residence part, especially if the property was partly let or divided.

Make sure you compute the relief carefully: it’s the lower of (a) the amount of PRR applied, (b) £40,000, or (c) the gain attributable to the let part.

For 2025/26: although the core lettings relief rules have not changed recently, the importance of using correct records and time apportionments remains high — any mis-allocation may trigger HMRC enquiries.

5. Business Asset Disposal Relief (formerly Entrepreneurs’ Relief)

The fifth frequent area of Capital Gains Tax errors is around Business Asset Disposal Relief (BADR, formerly known as Entrepreneurs’ Relief).

Many taxpayers misunderstand eligibility, relief limits or the applicable tax rate — mistakes that can cost dearly.

Key points for 2025/26 and beyond:

• BADR still has a lifetime limit of £1 million of qualifying gains per individual.

• The reduced CGT rate for qualifying gains disposed of on or after 6 April 2025 is 14% (previously 10%).

• From 6 April 2026 the rate will increase again to 18%.

Common errors: assuming the old 10% rate still applies; failing to check the 2-year qualifying period; forgetting that the relief is lifetime not annual; mis-classifying assets; or failing to make a timely claim.

Avoiding error: if you’re disposing of business assets or shares in a trading company, check the qualifying criteria, act early and get your records in order. If you time the disposal before 6 April 2025 you might still secure the 10% rate, but after that it’s 14%. Seek professional advice.

​How Trueman Brown Chartered Accountants can help

When navigating the minefield of Capital Gains Tax errors, expert help can prove invaluable.

At Trueman Brown we specialise in helping clients identify potential traps, apply reliefs correctly and submit accurate returns.

Whether you’re disposing of residential property, letting property, selling a business or settling estates, we can support you.

To explore how we can assist, please contact us at mark@truemanbrown.co.uk or call 01708 397262.

We’ll review your situation, highlight any potential pitfalls and implement a tailored strategy to minimise CGT exposure while ensuring full compliance with HMRC rules.

Don’t let avoidable mistakes turn into unnecessary tax bills.

FAQ – Frequently Asked Questions

Q1: What is the annual exempt amount for CGT in 2025/26?
A: For the 2025/26 tax year, the annual exempt amount for individuals is £3,000. For other trustees it is £1,500.

Q2: Does the main-residence relief (PRR) final period exemption still apply?
A: Yes. If you dispose of your only or main residence, you may claim PRR, including the final period exemption (e.g., 9 months standard, 36 months if you move into care). You must apply the correct period and ensure you meet the eligibility criteria.

Q3: What are the CGT rates for 2025/26 on non-residential assets?
A: For disposals of non-residential assets (not residential property), once the annual exempt amount is deducted, the remainder is taxed according to your income tax band. For example, if the gain falls within your basic rate income tax band, it is taxed at 18%; above that it is taxed at 24%.

Q4: I’m selling a business – how does BADR apply now?
A: If you meet the qualifying conditions, for disposals on or after 6 April 2025 the tax rate under BADR is 14% on qualifying gains (subject to the lifetime limit of £1 million). From 6 April 2026 the rate will rise to 18%.

Q5: What happens if I miss the 60-day reporting deadline for residential property?
A: If you dispose of UK residential property and make a gain, you must report and pay within 60 days. Missing this deadline may trigger automatic penalties and interest from HMRC. It’s an area where many Capital Gains Tax errors occur.

Q6: Can I offset losses against my gain to reduce my CGT?
A: Yes. Allowable capital losses can be set against your gains, reducing the net gain before applying the annual exempt amount and then the tax rates. Failing to bring forward or apply losses properly is a common error.

Q7: Should I contact Trueman Brown before making a disposal?
A: Absolutely. Early planning helps avoid Capital Gains Tax errors. Contact us at mark@truemanbrown.co.uk or 01708 397262 and we can help review your situation ahead of time, helping you get the reliefs right and meet deadlines.

Disclaimer: This article is for general guidance only and does not constitute professional advice. Tax rules may change and your personal circumstances must be considered. For tailored advice please contact Trueman Brown.