What is the capital gains tax rate on index funds in United Kingdom?

The headline capital gains tax rate in United Kingdom is 20%. Capital gains tax rate (high income). Allowances, holding periods and tax-advantaged accounts can change what you actually pay.

How much tax would I pay on a $100,000.00 gain in United Kingdom?

At the headline rate of 20%, a $100,000.00 gain would attract roughly $20,000.00 in capital gains tax, leaving $80,000.00 before any allowances.

How does United Kingdom compare with the rest of Europe?

The average headline capital gains rate across Europe in our dataset is 10.0%, so United Kingdom at 20% is above the regional average.

Index Fund Taxes in United Kingdom

Investors in United Kingdom face a headline capital gains rate of 20% on index funds and ETFs. Capital gains tax rate (high income).

Headline rate: 20%
Tax on a $100,000.00 gain: $20,000.00
Europe average: 10.0%

What this means for your returns

Tax applies to your gain, not your whole balance. If you invest and your portfolio grows by $100,000.00, a 20% rate leaves you with $80,000.00 of that growth before allowances.

Because the tax is usually triggered when you sell, holding for longer defers it and lets the untaxed amount keep compounding. That deferral is one of the structural advantages of buy-and-hold index investing over frequent trading.

Run your own projection with United Kingdom tax applied →

How United Kingdom compares in Europe

Capital gains tax rates across Europe
Country	Capital gains rate
Switzerland	0%

Frequently Asked Questions

Headline statutory rates as of 2025-01-01, collected from national tax authority publications. Rates exclude allowances, exemptions, tax-advantaged accounts, local surcharges and treaty relief, and change frequently. Confirm your position with a tax professional in United Kingdom.