What is capital gains tax?
Capital gains tax is charged on the profit made when you sell or give away an asset that has risen in value — typically shares, second properties or business interests. Your main home is usually exempt, as are assets held inside ISAs and pensions.
Gifts count as disposals at market value, so giving an asset away can create a tax bill even though no money changed hands. Transfers between spouses and civil partners are the exception, passing at no gain and no loss.
There is no capital gains tax on death. Instead the assets are rebased to their date-of-death value, so the gain accrued over a lifetime disappears. This is why gifting an appreciated asset in life can cost more overall than leaving it in the estate — a genuine tension between capital gains tax and inheritance tax planning that has no universally right answer.
Disposals of residential property have their own reporting and payment deadline, separate from the self assessment cycle, and penalties apply for missing it.