Tax19 October 2026

Capital Gains Tax 2026/27: Rates, the £3,000 Allowance, and 8 Legal Ways to Cut Your Bill

Written and reviewed by, LLM (UK), CFP®·Published

Capital Gains Tax 2026/27: Rates, the £3,000 Allowance, and 8 Legal Ways to Cut Your Bill

The Capital Gains Tax (CGT) allowance has been cut from £12,300 to just £3,000, so a modest gain on shares, crypto or a buy-to-let flat can now produce a real tax bill.

This guide covers CGT for 2026/27 (6 April 2026 to 5 April 2027), with two worked examples and eight legal ways to pay less. Figures assume income tax bands for England, Wales and Northern Ireland.

Try it yourself: the Capital Gains Tax Calculator works out your bill in seconds, including how much of your gain falls at 18% and how much at 24%.

The 2026/27 CGT rates and allowance

Item 2026/27 figure
Annual exempt amount (tax-free allowance) £3,000
Rate on gains within your unused basic rate band 18%
Rate on gains above the basic rate band 24%
Residential property rates Same as other assets: 18% / 24%
Business Asset Disposal Relief rate 18%
Business Asset Disposal Relief lifetime limit £1,000,000 of gains
Basic rate band £37,700

Since 30 October 2024, residential property and other assets such as shares have been taxed at the same rates.

Business Asset Disposal Relief (BADR), for people selling all or part of a qualifying business or qualifying shares in their own trading company, rose from 14% to 18% from 6 April 2026. It still applies to up to £1 million of qualifying gains over your lifetime. The conditions must broadly have been met for at least two years before the sale. Its main value is now for higher-rate taxpayers, who would otherwise pay 24%.

How your CGT rate is worked out

Your CGT rate depends on how much of your basic rate band your income has already used. HMRC's method is:

  1. Work out your taxable income: total income minus your Personal Allowance (£12,570) and any reliefs.
  2. Work out your total taxable gains: gains minus allowable losses, minus the £3,000 allowance.
  3. Add the taxable gains on top of your taxable income.
  4. Any part of the gain that fits within the £37,700 basic rate band is taxed at 18%. Anything above it is taxed at 24%.

So a basic-rate taxpayer can still pay 24% on part of a large gain. Higher and additional rate taxpayers pay 24% on all taxable gains.

Worked example 1: £40,000 salary, £20,000 gain on shares

Priya earns a salary of £40,000 and sells shares held in an ordinary (non-ISA) investment account, making a £20,000 gain after costs.

Step Figure
Salary £40,000
Less Personal Allowance £12,570
Taxable income £27,430
Basic rate band left (£37,700 minus £27,430) £10,270
Gain £20,000
Less annual exempt amount £3,000
Taxable gain £17,000
£10,270 at 18% £1,848.60
£6,730 at 24% £1,615.20
Total CGT £3,463.80

Even though Priya is a basic-rate taxpayer, £6,730 of her gain is taxed at 24%. We return to her below.

Worked example 2: a higher-rate taxpayer selling a second property

Tom earns £70,000, so his taxable income is £57,430 and his basic rate band is already full. He sells a buy-to-let flat he never lived in.

Step Figure
Sale price £300,000
Less purchase price £225,000
Less buying costs (legal fees and similar) £6,000
Less selling costs (estate agent and solicitor) £4,500
Less improvement costs (an extension) £4,500
Gain £60,000
Less annual exempt amount £3,000
Taxable gain £57,000
CGT at 24% £13,680

Because this is UK residential property, Tom cannot wait for his tax return. He must report the sale and pay the tax within 60 days of completion, using HMRC's Capital Gains Tax on UK property service. If the sale completes on 14 November 2026, the deadline is 13 January 2027. Missing it can mean interest and penalties. If Tom is in Self Assessment, he also includes the sale on his 2026/27 return.

The Buy-to-Let Calculator helps check whether a sale makes sense after tax.

Allowable costs and losses

You pay CGT on the gain, not the sale price. You can generally deduct:

  • The original purchase price.
  • Costs of buying and selling, such as solicitor and estate agent fees, and broker dealing costs for shares.
  • Capital improvements, such as an extension. Routine upkeep and redecoration do not count.

Losses in the same tax year are set against gains first. Unused losses carry forward, and earlier-year losses are only used to bring gains down to the £3,000 allowance, so the allowance is not wasted. The catch: you must claim a loss within four years of the end of the tax year in which you made it. A loss on shares sold in 2026/27 must be claimed by 5 April 2031.

Main residence relief basics

Selling your home is usually CGT-free under Private Residence Relief, provided it has been your only or main home throughout, you have not let part of it out (a lodger is fine), you have not used part of it exclusively for business, and the grounds are under 5,000 square metres.

If a property was your main home for only part of the time, relief is given for the qualifying period, and the final 9 months of ownership always qualify if it was your main home at some point. That window extends to 36 months if you are disabled or in long-term residential care and own only one home.

8 legal ways to cut your CGT bill

1. Use your £3,000 allowance every year. It cannot be carried forward, so realising around £3,000 of gains each year resets your cost base tax-free.

2. Spread disposals across tax years. Selling part before 5 April and the rest after 6 April gives you two allowances and two basic rate bands. If Priya split her £20,000 gain into £10,000 in each of two tax years (assuming the same salary and rules), each half would leave a £7,000 taxable gain, all within her remaining basic rate band, costing £1,260 a year, or £2,520 in total. That is £943.80 less than selling in one go.

3. Transfer assets to your spouse or civil partner. Transfers between spouses and civil partners living together are on a no gain, no loss basis, so no CGT arises on the transfer. Your partner takes over your original cost. Had Priya given half her shares to a husband with no income, their combined bill would also be £2,520.

4. Pay into a pension to extend your basic rate band. Personal pension contributions paid under relief at source extend your basic rate band by the gross contribution, and that extension applies to CGT as well as income tax. If Priya paid £5,000 into a personal pension, it would be grossed up to £6,250, lifting her remaining band to £16,520. Only £480 of the gain would then fall at 24%, and her CGT bill would drop to £3,088.80, a saving of £375 on top of the pension tax relief. Contributions count towards the £60,000 annual allowance. Model this with the Pension Calculator.

5. Bed and ISA. Sell investments in a taxable account (using your allowance) and immediately rebuy them inside a Stocks and Shares ISA. Future growth is then free of CGT for good. You can add up to £20,000 a year across your ISAs.

6. Bed and spouse. Selling shares and buying the same shares back yourself within 30 days does not work for tax: the 30-day rule matches the sale with the repurchase, so no gain or loss is crystallised for the old holding. But the rule applies only to the same person. If your spouse or civil partner buys the shares instead, or you buy them back in an ISA or pension, the gain is realised as intended.

7. Hold investments in ISAs and pensions from the start. Gains inside ISAs and pensions are outside CGT altogether. Our guide to tax-efficient account placement explains what to hold where.

8. Give to charity. Gifts of assets to a UK charity are free of CGT, so donating shares that have risen in value avoids the tax that would arise if you sold them first. If you sell to a charity for less than market value, the gain is based on what the charity actually pays.

How to report and pay

Situation How to report Deadline
UK residential property with tax to pay Capital Gains Tax on UK property service Report and pay within 60 days of completion
Other gains, already in Self Assessment Self Assessment tax return 31 January after the tax year ends
Other gains, not in Self Assessment, UK resident Real-time Capital Gains Tax service Report by 31 December after the tax year ends, pay by 31 January

For a 2026/27 gain on shares reported through the real-time service, that means reporting by 31 December 2027 and paying by 31 January 2028. If you are already registered for Self Assessment, HMRC says you must include the gain on your return rather than use the real-time service. The Self-Assessment Calculator can help you estimate your overall bill.

The Autumn Budget on 28 October 2026 could change these rules, so check the latest position on gov.uk before you act.

Frequently asked questions

What is the CGT allowance for 2026/27? £3,000 per person. Spouses and civil partners each get their own, so a couple can realise £6,000 of gains tax-free.

Are residential property gains taxed more than shares? Not any more. Since 30 October 2024, both are taxed at 18% within the basic rate band and 24% above it. The difference is in reporting: UK residential property gains must be reported and paid within 60 days.

Can I offset a loss from an earlier year? Yes, as long as you claimed it within four years of the end of the tax year you made it. Carried-forward losses only reduce your gains down to the £3,000 allowance, and the rest keeps rolling forward.

Does a pension contribution really lower my CGT? It can, if part of your gain falls at 24%, because the gross contribution extends your basic rate band.

The bottom line

With a £3,000 allowance and rates of 18% and 24%, CGT reaches far more people than it used to. The biggest wins come from planning before you sell: using each year's allowance, spreading disposals, sharing gains with a spouse, topping up a pension and moving investments into ISAs. Selling UK residential property? Diarise the 60-day deadline the day you agree the sale.

Run your figures through the Capital Gains Tax Calculator.

Related calculators and guides

This article is for general guidance only and is not personalised tax advice. Tax rules are complex and your circumstances may differ. For advice tailored to your situation, speak to a qualified accountant or tax adviser. Figures are for the 2026/27 tax year and sourced from gov.uk.

Sources

Rates and rules in this article are taken from the official pages below. Figures were checked against these sources at the last review date shown above; always confirm against the source before acting.

About the author

, LLM (UK), CFP®, CIM®, PFP®. Financial planner with 18 years in banking and wealth management, holding a UK master of laws and the Canadian CFP®, CIM® and PFP® designations. Writes and reviews every calculator and article on FinanceToolz.

Rates and thresholds in this article are taken from HMRC and GOV.UK. See our editorial policy for how content is sourced, reviewed and corrected. This is general information, not regulated financial advice.

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