Capital Gains Tax 2026/27: Rates and Allowance

What are the Capital Gains Tax rates for 2026/27?

Capital Gains Tax (CGT) is charged on profit when you sell or dispose of an asset that has risen in value — shares, funds, a second property, crypto or valuables. You pay tax on the gain, not the full sale price.

For 2026/27, the main rates are 18% for gains that fall within your remaining basic-rate band and 24% for gains above it. Which rate applies depends on your other taxable income in the same tax year — salary, self-employed profit, rental income and so on.

The £3,000 annual exempt amount

Everyone gets an annual exempt amount (AEA) of £3,000 for 2026/27. Gains up to this limit are tax-free, no matter how much you earn. It has been cut sharply in recent years — it was £12,300 in 2022/23 and £6,000 in 2023/24 — so more investors now face a CGT bill.

The allowance is per person, per tax year. Couples each have their own £3,000. You cannot carry unused allowance forward to a future year — use it or lose it.

How CGT interacts with your income

CGT does not sit in isolation. Your other income is counted first and uses up part of your basic-rate band (£37,700 above the personal allowance in 2026/27). Gains are then taxed at 18% on any slice that fits in the remaining basic band, and 24% on the rest.

Example: on a £40,000 salary, about £27,430 of your basic band is already used, leaving roughly £10,270. A £20,000 taxable gain (after the £3,000 allowance) would be split — £10,270 at 18% and £9,730 at 24%.

If you earn £60,000 or more, your basic band is usually full and all taxable gains are charged at 24%.

Worked examples for 2026/27

The examples below assume a single disposal in the tax year and the standard personal allowance. They show CGT only — income tax and NI on salary are separate.

What assets are liable for CGT?

CGT applies to a wide range of assets: shares and funds held outside an ISA, cryptocurrency, buy-to-let and second homes, business assets, and valuable personal possessions worth £6,000 or more (such as art or antiques).

Some assets are exempt. Your main home usually qualifies for Private Residence Relief if you have lived in it throughout ownership. ISAs, most gilts and premium bonds, and cars are also outside CGT.

• Liable: shares, funds, crypto, second properties, business assets.
• Usually exempt: your main home, ISA investments, most UK government bonds.
• Special rules: letting relief and PRR may reduce CGT on former main homes.

CGT on shares and investments

When you sell shares or funds for more than you paid, the profit is a capital gain. You can deduct the purchase price, dealing costs and certain improvements, but not ongoing management fees or advice charges.

If you hold the same share in multiple purchases, HMRC uses 'share matching' rules — typically matching against same-day purchases first, then the 30-day rule, then the average cost of your holding pool.

Dividends received while you hold the shares are taxed separately under dividend tax rules — they are not part of the capital gain when you sell.

CGT on property

Selling a property that is not your main home — a buy-to-let, holiday home or inherited house — usually triggers CGT on the profit. You can deduct purchase costs, stamp duty, legal fees and certain improvement costs, but not routine maintenance or mortgage interest.

Since 2020, UK residential property disposals must be reported to HMRC and the tax paid within 60 days of completion, even if you normally file Self Assessment later. Missing the deadline can lead to penalties.

How to reduce your CGT bill

Use your £3,000 annual exempt amount each year — selling enough to crystallise gains within the allowance avoids tax entirely. Spreading disposals across tax years can keep gains below the threshold.

Hold investments inside a Stocks & Shares ISA — gains are tax-free and do not count towards your allowance. Couples can transfer assets between spouses or civil partners tax-free to use both £3,000 allowances and both sets of basic-rate band.

Pension contributions reduce your taxable income, which can leave more basic-rate band room for gains to be taxed at 18% rather than 24%. Losses from other disposals in the same tax year can offset gains.

• Use both spouses' £3,000 allowances where possible.
• Hold long-term investments in an ISA.
• Offset gains with losses from other assets in the same year.
• Time disposals to use spare basic-rate band in lower-income years.

How and when to pay CGT

Most people report CGT through Self Assessment, due by 31 January after the tax year ends. If your total gains are below the annual exempt amount and you have no other reason to file, you may not need to report — but keep records anyway.

Residential property sales require a separate 60-day report and payment. Use our Capital Gains Tax Calculator to estimate what you owe for 2026/27, and the Income Tax Calculator to see how your salary uses up the basic-rate band first.