Company Capital Gains & Corporation Tax: Complete CT600 Guide
When your limited company sells an asset for more than it cost, the profit is a chargeable gain. Unlike individuals who pay Capital Gains Tax separately, companies pay Corporation Tax on their gains — reported directly on the CT600.
How Company Capital Gains Work
Companies don't have a separate CGT regime. Instead, chargeable gains are added to your other profits and taxed at the standard Corporation Tax rates — 19% on total profits up to £50,000, 25% above £250,000, with marginal relief in between (thresholds are divided between associated companies).
What Counts as a Chargeable Asset?
- Property (offices, warehouses, land)
- Shares and securities in other companies
- Plant and machinery (though most disposals are dealt with through capital allowances instead)
- Goodwill and intellectual property — but only if created or acquired before 1 April 2002. Goodwill, patents, trademarks and similar assets created or acquired on or after that date fall under the separate corporate intangible fixed assets regime, where profits and losses are taxed as income rather than as chargeable gains
What's Exempt?
- Cars — always exempt from chargeable gains
- Wasting assets with a predictable life under 50 years (unless used in a trade and they attracted capital allowances)
Calculating the Gain
Sale proceeds
− Original cost (including purchase costs)
− Enhancement expenditure (improvements)
− Disposal costs (legal fees, agent fees)
= Chargeable gain (or allowable loss)
Indexation Allowance
Companies can claim indexation allowance to remove the inflationary element of a gain. This uses the Retail Prices Index (RPI) from the month of purchase to the month of sale (or December 2017, whichever is earlier — indexation was frozen from January 2018). HMRC publishes the frozen indexation factors in its December 2017 indexation allowance table.
Important: Indexation allowance can reduce a gain to zero but cannot create or increase a loss.
Example
Your company bought a commercial property in March 2010 for £200,000 and sold it in January 2026 for £350,000. HMRC's frozen indexation factor for March 2010 is 0.260, so the allowance is £200,000 × 0.260 = £52,000:
| Item | Amount |
|---|---|
| Sale proceeds | £350,000 |
| Original cost | £200,000 |
| Indexation allowance (Mar 2010 to Dec 2017, factor 0.260) | £52,000 |
| Chargeable gain | £98,000 |
This £98,000 is added to your other profits on the CT600 and taxed at your Corporation Tax rate.
Substantial Shareholding Exemption (SSE)
If your company sells shares in another company and meets certain conditions, the gain may be completely exempt from Corporation Tax under the SSE:
- Your company held at least 10% of the ordinary share capital
- For a continuous 12-month period within the 6 years before sale
- The company being sold is a trading company (or holding company of a trading group)
This is one of the most valuable reliefs available — it can exempt gains of any size.
CT600 Boxes for Capital Gains
| Box | Description |
|---|---|
| Box 210 | Gross chargeable gains |
| Box 215 | Allowable losses, including losses brought forward |
| Box 220 | Net chargeable gains (box 210 minus box 215) |
The net figure in box 220 feeds into box 235 (profits before other deductions and reliefs), so your gains are taxed alongside trading profits, interest and property income.
Losses
If you sell an asset at a loss:
- Current year losses are set against gains in the same period automatically
- Excess losses carry forward indefinitely against future gains
- Capital losses cannot be set against trading profits (they're ring-fenced)
Both current-year and brought-forward capital losses go in box 215, capped at the gains in box 210 — box 220 can never be negative.
Rollover Relief
If your company sells a qualifying business asset and reinvests the proceeds in a new qualifying asset within 12 months before to 36 months after the sale, you can defer the gain by claiming rollover relief.
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