In the 2026/27 tax year you can make £3,000 of capital gains completely tax-free — and pay Capital Gains Tax (CGT) at 18 per cent if you are a basic-rate taxpayer or 24 per cent if you are a higher or additional-rate taxpayer on gains above that. Those rates now apply to shares, second properties, crypto and most other assets alike. The allowance has been slashed from £12,300 just three years ago, so far more ordinary sellers now owe tax. The good news: with your annual allowance, spouse transfers, Bed & ISA, pensions and loss offsetting, most people can cut — or wipe out — the bill legally.
What Capital Gains Tax is and what it applies to
Capital Gains Tax is a tax on the profit you make when you sell — or otherwise dispose of — an asset that has risen in value. Crucially, it is charged on the gain, not the total amount you receive. If you buy shares for £5,000 and sell them for £9,000, the £4,000 gain is what matters, not the £9,000.
CGT can apply when you sell or give away:
- Shares and funds held outside an ISA or pension
- A second home or buy-to-let property (your main home is normally exempt under Private Residence Relief)
- Cryptoassets such as Bitcoin or Ethereum — HMRC treats most crypto disposals as chargeable
- Business assets, including selling all or part of a business
- Valuables (“chattels”) worth more than £6,000, such as art, antiques or jewellery
Some disposals are exempt: your main home, personal cars, ISAs and pensions, UK Government gilts and Premium Bonds, and gifts between spouses or civil partners. Money held in cash also never triggers CGT — the tax bites on assets that grow in value.
The 2026/27 CGT allowance: down to £3,000
Every individual gets an annual tax-free allowance, officially called the Annual Exempt Amount. For 2026/27 it is £3,000 per person. You only pay CGT on gains above this figure in a single tax year, and the allowance cannot be carried forward — use it or lose it each 6 April.
This allowance has been cut hard. It was £12,300 in 2022/23, halved to £6,000 in 2023/24, and halved again to £3,000 from April 2024, where it remains. That collapse — a form of fiscal drag — means many people who never previously worried about CGT now find modest share or property sales pushing them into a charge.
CGT rates for 2026/27
The rate you pay depends on your total taxable income and the type of asset. Following the Autumn 2024 Budget, the main rates rose from 30 October 2024 so that shares and other assets are now taxed at the same rates as residential property: 18 per cent where the gain falls within your remaining basic-rate income tax band, and 24 per cent on any part above it. There is no longer a separate, higher 28 per cent rate for second homes — residential property sits at 18/24 per cent too.
The way the bands work catches people out. You add your taxable gains (after the allowance) on top of your income. Any gain that fits within what is left of your £37,700 basic-rate band is taxed at 18 per cent; anything above is taxed at 24 per cent. A single large gain can therefore be taxed partly at 18 and partly at 24 per cent.
| Asset / relief | Basic-rate band | Higher/additional-rate band |
|---|---|---|
| Shares, crypto & other assets | 18 per cent | 24 per cent |
| Residential property (e.g. second home, buy-to-let) | 18 per cent | 24 per cent |
| Business Asset Disposal Relief (BADR)* | 18 per cent | 18 per cent |
| Investors’ Relief* | 18 per cent | 18 per cent |
| Most trustees & personal representatives | 24 per cent | 24 per cent |
Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) has been climbing on a phased timetable. The relief rate was 10 per cent until 5 April 2025, rose to 14 per cent for 2025/26, and increased again to 18 per cent from 6 April 2026. Investors’ Relief has followed the same path, and its lifetime limit was cut from £10 million to £1 million. Meanwhile, carried interest (relevant to some fund managers) has moved out of the CGT regime entirely from 6 April 2026 and is now taxed as trading income under income tax and National Insurance rules rather than at a CGT rate.
A worked example
Priya earns £50,000 a year, making her a higher-rate taxpayer. In 2026/27 she sells a portfolio of shares for a £15,000 gain.
- Gain: £15,000
- Less annual allowance: −£3,000
- Taxable gain: £12,000
- Because her income already uses up her basic-rate band, the whole taxable gain is taxed at 24 per cent
- CGT due: £2,880
Now compare a basic-rate taxpayer. Tom earns £30,000 and makes the same £15,000 gain. After the £3,000 allowance, his £12,000 taxable gain is added to his income. He has roughly £7,700 of basic-rate band left (£37,700 minus his £30,000 taxable income after the personal allowance). So £7,700 is taxed at 18 per cent (£1,386) and the remaining £4,300 at 24 per cent (£1,032) — a total of £2,418. Same gain, lower bill, because part of it slots into his basic-rate band.
How to report and pay CGT
There are two routes, and which you use depends on the asset.
Most assets: Self Assessment
For shares, crypto and other non-property assets you normally report gains on your Self Assessment tax return. The deadline to file online and pay is 31 January after the end of the tax year — so gains made in 2026/27 must be reported and paid by 31 January 2028. You must report if your total gains exceed the £3,000 allowance, or in some cases if total proceeds are large, even where no tax is due. HMRC also offers a “real-time” CGT service for one-off reporting outside a return.
Residential property: the 60-day rule
If you sell UK residential property at a taxable gain — a second home or buy-to-let, for example — you must report it and pay the estimated CGT within 60 days of completion using HMRC’s online CGT on UK Property service. Miss the 60-day window and penalties and interest can follow. This is separate from, and much tighter than, the Self Assessment timetable, so it is easy to trip over.
Eight legal ways to cut your CGT bill
None of this is aggressive avoidance — these are the mainstream, HMRC-recognised ways to keep more of your gains.
- Use your annual allowance every year. The £3,000 can’t be carried forward, so realising gains up to that limit each April is genuinely tax-free.
- Transfer assets to your spouse or civil partner. Gifts between spouses are exempt from CGT, so couples can double up to £6,000 of tax-free gains and shift assets to whoever pays the lower rate before selling.
- Bed & ISA. Sell an investment to use your allowance, then immediately buy it back inside an ISA so future growth and income are permanently sheltered from CGT.
- Use your pension. Contributing to a pension can extend your basic-rate band, potentially pulling more of a gain into the 18 per cent rate, and investments inside a pension grow free of CGT.
- Spread disposals across tax years. Selling half before 6 April and half after uses two years’ allowances and two sets of basic-rate band.
- Offset your losses. Capital losses reduce your gains. Losses can be carried forward indefinitely if reported to HMRC, usually within four years.
- Consider EIS/SEIS. Enterprise Investment Scheme and Seed EIS investments offer CGT deferral or relief, but these are high-risk and not for everyone.
- Claim all available reliefs. Private Residence Relief, BADR and gift holdover relief can dramatically reduce or remove a charge where you qualify.
Keep more of your money
For more UK tax and savings guides, visit GetSmartSaver.
Explore GetSmartSaver →Where CGT fits with the rest of your tax planning
CGT rarely sits in isolation. Because your CGT rate hinges on how much basic-rate income tax band you have spare, it pays to look at your whole picture. Frozen income tax thresholds are quietly dragging more people into higher-rate bands, which in turn pushes gains into the 24 per cent rate — we explain that squeeze in our guide to frozen tax thresholds and fiscal drag. Sheltering investments inside a tax wrapper is the single most effective long-term defence, so it is worth reading how much you can shelter in our ISA allowance 2026 guide before you hold shares in a taxable account. And if you want to know exactly how much basic-rate band you have left to soak up gains at 18 per cent, our take-home pay calculator shows where your income leaves you within the bands.
What might change at the Autumn 2026 Budget
There is persistent speculation that CGT could rise further, with commentators floating ideas such as aligning CGT rates more closely with income tax, cutting reliefs, or bringing more assets into scope. It is important to be clear: as of July 2026, none of that is law. The confirmed position for 2026/27 is the £3,000 allowance and the 18/24 per cent rates set out above. Any changes announced at an Autumn 2026 Budget would typically take effect later — but because CGT changes have sometimes applied from Budget day itself, anyone sitting on large unrealised gains may want to review their position with an adviser ahead of time rather than assume today’s rules will last.
Frequently Asked Questions
What is the CGT allowance for 2026/27?
The annual exempt amount is £3,000 per person for 2026/27. Most trustees get £1,500. You only pay CGT on gains above your allowance, and it cannot be carried into the next year.
What are the current Capital Gains Tax rates?
For 2026/27 the main rates are 18 per cent for basic-rate taxpayers and 24 per cent for higher and additional-rate taxpayers. These apply to shares, crypto, other assets and residential property alike. Business Asset Disposal Relief and Investors’ Relief are charged at 18 per cent.
Do I pay CGT on cryptocurrency?
Usually yes. HMRC treats most disposals of cryptoassets — including selling for cash, swapping one coin for another, or using crypto to pay for goods — as chargeable events. Gains above your annual allowance are taxed at 18 or 24 per cent.
How long do I have to report CGT on a property sale?
If you sell UK residential property at a taxable gain you must report it and pay the CGT within 60 days of completion using HMRC’s online service. Other assets are reported through Self Assessment by the following 31 January.
Can I avoid CGT legally?
You can legitimately reduce it by using your annual allowance, transferring assets to a spouse, moving investments into an ISA (Bed & ISA), contributing to a pension, offsetting losses and spreading disposals across tax years. These are all HMRC-recognised strategies, not avoidance schemes.
Is my main home subject to CGT?
Normally no. Private Residence Relief usually exempts the home you live in as your only or main residence. CGT can apply if you let part of it out, used part exclusively for business, or the grounds are very large.
Last reviewed: July 2026. This article is for general information only and does not constitute financial or tax advice. Tax rules change and depend on your circumstances — verify current rules at gov.uk and consider a qualified tax adviser before acting.
