Capital Gains Tax 2026/27 | Rates, Allowance & Reliefs

Capital Gains Tax (CGT) is charged on the profit you make when you sell or dispose of an asset that has increased in value — shares, second homes, business assets, cryptocurrency and personal possessions worth more than £6,000. You pay tax only on the gain, not the sale proceeds, and only on gains above your £3,000 annual exempt amount for 2026/27.

The allowance has been cut twice in three years (from £12,300 in 2022/23), so far more disposals now trigger a tax bill. Work out your liability before you sell with the CGT Calculator→, and plan tax-free repositioning of share portfolios with the Bed and ISA Calculator→.

CGT Rates and Allowance for 2026/27

The annual exempt amount is £3,000 for individuals and £1,500 for most trusts. Gains above the allowance are taxed at the rate that matches your income tax band. Residential property uses the same 18%/24% individual rates in 2026/27; carried interest is dealt with under Income Tax from 6 April 2026 rather than a separate CGT rate.

The rate you pay depends on where the gain sits relative to the applicable Income Tax basic-rate band. Add your taxable income to your gain for the year: the slice that remains within the basic-rate band is taxed at 18%, and everything above it at 24%. Because the exemption resets every 6 April, spreading large disposals across tax years is the single most effective way to cut a CGT bill, and married couples who transfer assets between themselves can shelter £6,000 of gains jointly.

What Counts as a Chargeable Disposal

A disposal happens whenever you cease to own an asset, even if no cash changes hands. Selling shares, exchanging one cryptocurrency for another, giving assets away (other than to a spouse), and selling a second home are all chargeable events. The gain is normally sale proceeds minus acquisition cost, plus allowable costs such as stamp duty, legal fees and capital improvements.

• Shares and funds outside ISAs and SIPPs are taxable; holdings inside a tax wrapper are exempt.
• Your main home is exempt under Principal Private Residence relief, including the final 9 months of ownership after you move out.
• Personal possessions worth £6,000 or less, UK gilts, Premium Bonds and motor vehicles are exempt entirely.
• Gifts to your spouse or civil partner are no-gain/no-loss transfers, letting a couple use two allowances.
• Losses offset gains in the same year and can be carried forward; claim unused losses through the applicable HMRC route within four years of the end of the tax year.

Worked Examples

Example 1 — Shares. Anita earns £40,000 and sells shares making a £30,000 gain. Her remaining basic-rate band is £50,270 − £40,000 = £10,270. After the £3,000 exemption, £7,270 of gain is taxed at 18% and the remaining £19,730 at 24%.

Example 2 — Business disposal. Raj sells his qualifying trading company for a £400,000 gain and claims Business Asset Disposal Relief, which taxes qualifying business disposals at 18% up to a £1m lifetime limit. He satisfies the applicable company-share conditions — including the qualifying holding period, officer or employee requirement, and share and voting-rights tests — so the relief applies.

Without BADR, the same gain would cost £95,280 at 24% — the relief saves Raj £23,820.

Share Pooling and Matching Rules

Shares are subject to strict identification rules before the annual exemption is applied. All shares of the same class in one company are pooled under Section 104 at an average cost per share — you cannot elect to sell the expensive shares and keep the cheap ones. Two matching rules override the pool: same-day purchases match the disposal first, then repurchases of the same class within 30 days (the bed and breakfasting rule that stops you crystallising a gain while staying invested).

Buying back inside an ISA is not caught by the 30-day rule, which is what makes bed and ISA strategies work: sell within the £3,000 exemption, repurchase in the ISA the next day, and the tax-free wrapper protects all future growth.

Losses and Planning Strategies

Losses are the mirror image of gains: they offset gains in the same year, are deducted before the annual exemption, and any unused balance can carry forward. But a loss is disallowed if you repurchase the same shares within 30 days — the loss is added to the new holding's cost instead. Claim unused losses through the applicable HMRC route within four years of the end of the tax year so HMRC has them on record.

• Use the ISA allowance — £20,000 a year of shares can grow and be sold free of CGT forever.
• Stagger disposals — keep each tax year's gains under £3,000 by spreading sales across Aprils.
• Transfer to your spouse — no-gain/no-loss transfers let a couple use two exemptions and two ISA allowances.
• Harvest losses — sell losing positions to offset winners, watching the 30-day rule on any repurchase.

Key Reliefs at a Glance

Beyond the main residence exemption, three reliefs dominate UK CGT planning. Business Asset Disposal Relief taxes qualifying business disposals at 18% on a £1m lifetime limit. Investor's Relief applies the same 18% rate to qualifying unlisted trading company shares, subject to its current conditions and a £1m lifetime limit. Hold-over relief defers the gain when you gift business assets or shares in qualifying trading companies, so the recipient inherits your base cost and no tax is due at the point of the gift.

Claim BADR by the first anniversary of the 31 January following the end of the tax year of disposal. For a qualifying disposal in 2026/27, that normally means 31 January 2029. Make sure the conditions are met before the sale completes — relief claimed late or on a non-qualifying disposal may be rejected.

Reporting and Payment

Residential property has a separate, much faster track when a UK resident has CGT to pay: report and pay through the HMRC property service within 60 days of completion. Non-UK residents have a broader reporting obligation for UK property and land. For other gains, use the applicable HMRC route, including Self Assessment where required, rather than assuming that every disposal belongs on the same return.

Keep a disposal file

Retain contracts, completion statements, acquisition records, improvement invoices, dealing charges, valuation evidence, loss claims and the calculation used. Record the disposal date, not only the date negotiations began. If you are non-UK resident, temporarily resident, using a trust or disposing of an asset connected with a business, obtain advice on the residence and reporting rules before relying on the individual examples above.

The £3,000 annual exempt amount is a planning input, not a reason to sell an asset without considering market risk, fees or the investment objective. Recalculate when the sale price, tax year, income, losses or relief conditions change.

Joint ownership, gifts and the reporting record

For jointly owned property or investments, identify each owner's legal and beneficial share before calculating the gain. A shared bank account or one person's payment of the purchase costs does not automatically prove that the asset belongs to one person. Record the acquisition cost, improvement expenditure, selling costs and ownership split, then calculate each person's gain separately. The annual exempt amount and losses are personal, so they cannot simply be pooled because a couple shares a property.

A transfer between spouses or civil partners can be useful for using two allowances, but it should be documented before the later disposal. Record the transfer date, ownership percentage and any no-gain/no-loss treatment. A transfer to another family member is generally a disposal at market value, even where no money changes hands. If hold-over relief or another relief is being claimed, retain the election, supporting conditions and the recipient's base-cost record.

The reporting question should be answered before completion. A residential-property disposal with CGT due has the 60-day route; other gains may belong on Self Assessment or another HMRC service. The £50,000 proceeds test, residence status, trust ownership, non-UK property and business assets can change the route. Do not wait until the annual tax return to check a deadline that may already have started at completion.

After submitting, reconcile the report with the later tax return and keep the payment reference. If the completion date, gain, residence or relief changes, correct the relevant HMRC record rather than relying on a later spreadsheet. A provisional estimate can be useful for cash planning, but the official report and supporting documents control the compliance position.

Frequently Asked Questions

Run every disposal through the CGT Calculator→ and plan ISA funding with the Bed and ISA Calculator→. Pair this guide with Capital Gains on Shares 2026/27 and Capital Gains Tax on Property 2026/27 for asset-specific rules.

Official sources

• GOV.UK — Capital Gains Tax rates
• GOV.UK — Capital Gains Tax rates and allowances
• GOV.UK — If you make a loss
• GOV.UK — Reporting and paying Capital Gains Tax
• GOV.UK — Business Asset Disposal Relief
• GOV.UK — How to claim Business Asset Disposal Relief