Welcome to LQ!!!
What partitioning layout you have selected during RHEL install. If you have selected use all space or remove any partition and create the default layout then obviously all space is used.
What is the output of:
1
2
If output of above command shows that all 40 GB is used then the error is obvious.
Would like to mention that RHEL is for commercial use and it is not free. So if you doing it for testing purpose then use CentOS instead. Infact you can go with CentOS 6 or CentOS 7 (CentOS 7 require 64 bit system with VT enabled to run under VMware).