Capital Gains Tax (CGT) is a tax on profit made when you dispose of an asset that has increased in value from when you purchased the asset.  Disposing of an asset includes: selling the asset; gifting or transferring the asset to someone else; swapping the asset for something else; or getting compensation for the asset (such as an insurance payout if an asset was destroyed).  The tax is calculated based on the gain you make from the disposal, not the total amount of money you received.

You will pay CGT on the following (these are known as chargeable assets):

• Most personal possessions worth £6,000 or more, but not your car.
• Property that is not your main home.
• Your main home if you have let it out, used it for business or it it is very large.
• Stocks and shares that are not in an ISA or in a Personal Equity Plan (PEP).
  
• Business assets.

You may also have to pay if sell or giveaway cryptoassets - check the guidance on the gov.uk website.  Asset dependant, you may be able to reduce any tax you owe by claiming a relief.  Finally, if you dispose of an asset you jointly own, you pay CGT on your share of the gain.

A key question members of the UK Armed Forces will likely have is whether they are required to pay CGT on their main home if it has been let out as a result of being unable to live there due to the location of their assignment(s).  This question is answered at the link below:

Do I pay Capital Gains Tax (CGT) on my property as a member of the Armed Forces?

When you don't pay it
You don't pay CGT on:

• Gains below the annual tax-free allowance (see below).
  
• Gifts to your husband, wife, civil partner or a charity.
• Gains from ISAs or PEPs.
• Gains from UK government gilts and Premium Bonds.
• Gains from betting, lottery or pools winnings.
• Inherited assets - if required you will pay Inheritance Tax (IHT)

CGT allowances
The CGT tax-free allowance for tax year 2024/25 is £3,000 (or £1,500 for trusts).  As mentioned above, the tax is paid on the gains you make, not the amount you receive.  Note that the tax-free allowance is on the total gains in a tax year, not per asset.

CGT Rates
CGT Rates vary depending on the asset and which Income Tax bracket you fall into.  The Capital Gains Tax rates section on the gov.uk website explains the rates in detail. 

Reporting and paying CGT
You do not receive a bill for CGT - it is a personal responsibility to work out if your total gains are above your tax-free allowance - if they are, you must report and pay CGT.  The process varies, depending on the asset:

• If you sold a residential property in the UK, follow the steps linked here.
  
• If you sold something else that's increased in value, follow the steps linked here.

Summary
Capital Gains Tax (CGT) is a lengthy topic, and the above serves as an overview.  For more information on CGT visit the CGT section on the gov.uk website.