UK Capital Gains Tax 2026/27 — Rates, Allowance, and How to Reduce Your Bill

Published 19 April 2026 · 13 min read

Sell shares, crypto, or a second property and you may owe Capital Gains Tax. The UK system is straightforward in principle — you pay tax on the profit when you dispose of an asset for more than you paid — but the details (the £3,000 allowance, 18%/24% rates, the 60-day property rule, dozens of reliefs) catch out most DIY filers. This guide walks through everything you need to know for 2026/27.

What is Capital Gains Tax?

Capital Gains Tax (CGT) is the tax you pay on the profit (the "gain") when you sell or otherwise dispose of an asset for more than you paid. It only applies to certain asset types (more on what's taxable below) and only on the profit portion — not the full sale proceeds.

If you bought shares for £10,000 and sold them for £15,000, your gain is £5,000 — and that's the figure CGT is calculated on, not the £15,000 sale price. Acquisition costs (purchase fees, stamp duty on property), enhancement costs (capital improvements to property), and disposal costs (estate agent fees, brokerage on sales) can be deducted to reduce the gain further.

The Annual Exempt Amount is now £3,000

Every UK individual gets a CGT Annual Exempt Amount (AEA) of £3,000 per tax year. Gains up to £3,000 pay zero CGT; only the portion above £3,000 is taxable. Crucially, the AEA is use-it-or-lose-it — you can't carry unused allowance forward to next year.

Historical context: the AEA was £12,300 in 2022/23, dropped to £6,000 in 2023/24, then halved again to £3,000 from 2024/25 onwards. The rapid reduction means many more disposals now fall into the CGT net, and even modest share sales or crypto trades can generate a filing requirement. Planning disposals across tax years to use multiple AEAs is now a more valuable strategy than it was a few years ago.

Current rates (2026/27)

From 30 October 2024 onwards, the UK unified CGT rates across all asset types:

Taxpayer band	Rate	Income threshold (2026/27)
Basic rate	18%	Up to £50,270
Higher rate	24%	£50,271 – £125,140
Additional rate	24%	Over £125,140

Previously, residential property had a higher CGT rate (28% then 24% for higher-rate payers) while shares paid 10%/20%. The Autumn Budget 2024 unified shares and "other" chargeable assets at 18%/24%, matching what property already paid after the October 2024 reduction.

The straddle rule: if your income plus gain crosses the basic-rate threshold (£50,270), the gain is split. The portion within the basic band pays 18%, the portion above pays 24%. This is the single most confusing part of CGT and where most DIY calculations go wrong. The CGT Calculator handles this split automatically.

What's subject to CGT?

• Shares and funds held outside an ISA or pension — e.g. in a General Investment Account (GIA), direct holdings
• Cryptocurrency — treated as property for CGT purposes. Each disposal (sale, trade to another coin, use to buy goods/services) is a taxable event.
• Second properties and buy-to-let — any residential property that isn't your main home
• Commercial property — offices, warehouses, land
• Personal possessions worth more than £6,000 — antiques, artwork, jewellery, vintage cars (but see exemptions below)
• Inherited property above the probate value — the gain is measured from the probate value, not the original purchase price
• Business assets — but often covered by Business Asset Disposal Relief (formerly Entrepreneurs' Relief) at 10%

What's exempt?

Several asset types escape CGT entirely:

• Your main home — Private Residence Relief (PRR) exempts gains on your principal residence for the time you lived there plus the final 9 months
• Assets inside an ISA — Cash, Stocks & Shares, and Lifetime ISAs. All growth tax-free, all disposals outside the CGT system.
• Assets inside a SIPP or workplace pension — all gains tax-free within the wrapper; income tax applies on eventual drawdown
• UK government gilts and qualifying corporate bonds — zero CGT on disposal
• Personal possessions under £6,000 — furniture, jewellery, watches (each individual item threshold, not aggregate)
• Cars for personal use — excluding classic/collector cars sold as investments
• Spousal/civil partner transfers — treated as no-gain-no-loss; receiving spouse inherits original cost for future CGT calculation
• Gifts to UK charities — no CGT on the disposal; donor may claim Gift Aid
• Prize winnings — lottery, premium bonds, betting proceeds (different tax treatment entirely)

How to calculate your CGT

Six steps:

1. Calculate the gain: sale price minus purchase price minus allowable costs (fees, stamp duty, improvements)
2. Apply any reliefs (PRR for main home, BADR for business assets, etc.) — this reduces the gain.
3. Subtract the Annual Exempt Amount (£3,000) — the result is your taxable gain.
4. Determine your income band — how much of your basic rate band is already used by salary/pension/rental income?
5. Apply the straddle rule — taxable gain splits between 18% and 24% based on where the total (income + gain) falls relative to £50,270.
6. Calculate total CGT — sum the 18% and 24% portions.

Worked example: £25,000 shares gain

You bought shares for £50,000 in 2020 and sold them for £75,000 in April 2026. Your salary is £35,000. No allowable costs.

Step	Value
Sale price	£75,000
Purchase price	£50,000
Total gain	£25,000
Less Annual Exempt Amount	−£3,000
Taxable gain	£22,000
Basic band remaining (£50,270 − £12,570 PA − £22,430 taxable income)	£15,270
At 18% (basic band)	£15,270 → £2,748.60
At 24% (higher band)	£6,730 → £1,615.20
Total CGT	£4,363.80

Effective rate: 17.5% on the full gain. You keep £20,636.20 after tax. If your salary had been £55,000 instead (already above the basic-rate ceiling), all £22,000 of taxable gain would have been at 24% = £5,280 CGT — a different £916 bill on the same gain.

Use the CGT Calculator to run your specific numbers.

The 60-day property rule

Residential property CGT has its own reporting requirement that catches many sellers out. Any gain on a UK residential property that isn't your main home must be reported and paid to HMRC within 60 days of completion — not in next January's Self Assessment return.

Reporting is via the "Report Capital Gains Tax on UK Property" online service on gov.uk. You need the completion date, the gain calculation, and your estimated annual income (to determine 18%/24% rate). Payment is due at the same time. Miss the 60-day window and you face a £100 automatic fine, plus further penalties and daily charges after 3 and 6 months.

Even if no CGT is owed (gain within the AEA, or offset by PRR), the return still needs filing if you have to report at all — the 60-day obligation is about reporting, not just paying. Overpayment or underpayment is reconciled at year-end via Self Assessment.

5 strategies to reduce your CGT bill

Legitimate planning can dramatically reduce CGT. Five approaches:

1. Use the £3,000 AEA every year

The allowance is use-it-or-lose-it. If you have a large portfolio of appreciated shares outside an ISA, sell £3,000 of gain every tax year to keep crystallising tax-free. Compound this over 10 years and you shelter £30,000 of gains at zero cost.

2. Spouse transfer (the £6,000 hack)

Transfers between spouses and civil partners happen on a no-gain-no-loss basis — no CGT event on the transfer itself. The receiving spouse inherits your original purchase price for future CGT calculation. Transfer an asset before disposal and each of you uses your own £3,000 AEA. Household tax-free capacity: £6,000 per year.

3. Bed & ISA

Sell shares in your General Investment Account (realising the gain — either using your AEA or paying CGT on the surplus) and immediately rebuy the same shares inside your Stocks & Shares ISA. The rebuy is protected from future CGT forever. Over a 5-10 year horizon this can save tens of thousands for large portfolios. Our ISA guide has more on using ISAs for capital growth.

4. Offset capital losses

Losses from disposals in the same tax year automatically offset gains before CGT is calculated. Losses from prior years (reported to HMRC within 4 years) can be brought forward. If you're sitting on a paper loss, realising it in the same tax year as a large gain can eliminate a significant portion of the CGT bill. Losses inside an ISA or SIPP are NOT usable against outside gains.

5. Pension contributions

Making a pension contribution reduces your adjusted net income for tax purposes. If you're straddling the basic rate band, a strategic pension contribution can drop you into the 18% band for the taxable gain, reducing the CGT rate on that portion from 24% to 18%. Double benefit: tax relief on the pension contribution AND lower CGT rate on the straddled gain.

Reporting and paying CGT

• Non-property disposals — report via Self Assessment by 31 January following the tax year end. Pay by the same deadline.
• Property disposals — report within 60 days of completion via the UK Property Reporting Service on gov.uk. Pay by the same deadline.
• Real-time service — if you don't normally file Self Assessment, you can use HMRC's real-time Capital Gains Tax service to report and pay a one-off gain without registering for SA.

Common mistakes

• Missing the 60-day property deadline — £100 fine plus mounting penalties. Set a calendar reminder at exchange, not completion.
• Forgetting the AEA — filers sometimes calculate CGT on the full gain without subtracting the £3,000 first.
• Not reporting losses — unreported losses can't be offset against future gains. File them within 4 years.
• Misapplying the straddle rule — filers often apply either all 18% or all 24% to the whole gain, missing the basic/higher split. Use the calculator to get this right.
• Ignoring spouse-transfer optimisation — if the receiving spouse has unused AEA and lower income, transferring before disposal can cut the household CGT bill significantly.
• Mixing ISA and non-ISA disposals — only non-ISA gains/losses count for CGT. An ISA loss can't be used to offset a GIA gain.

FAQs

Do I pay CGT if I sell my main home?

Usually no. Private Residence Relief (PRR) exempts gains on your main home for the time you lived there plus the final 9 months. If you lived there for the entire ownership period, CGT is zero. If you moved out and rented it out for a while, the proportion of the gain relating to the non-residence period may be chargeable - though the final 9 months are always covered regardless.

How much CGT do I pay on £10,000 of shares gain?

It depends on your income. £10,000 - £3,000 AEA = £7,000 taxable. With a £35,000 salary you have about £15,270 of basic band remaining, so the full £7,000 is taxed at 18% = £1,260 CGT. With a salary over £50,270, all £7,000 is at 24% = £1,680 CGT. Use the CGT Calculator with your exact figures.

Can I offset capital losses against gains?

Yes. Losses in the same tax year automatically offset gains before CGT is calculated. If losses exceed gains that year, carry the excess forward up to 4 years. Losses must be reported to HMRC within 4 years to be claimable - via Self Assessment or a loss claim letter. Losses inside an ISA or SIPP cannot be offset against outside gains.

Do I have to report CGT if it is below £3,000?

If your total gains are below £3,000, you do not need to file a CGT return for non-property disposals - the AEA covers it entirely. However, if your total disposal proceeds (the sale value, not the gain) exceed £50,000 in a year, HMRC still requires you to report the disposal even if no CGT is owed. For property, the 60-day rule requires a filing regardless of whether CGT is owed.

What's the CGT rate on crypto in 2026/27?

Same as other chargeable assets: 18% for basic-rate taxpayers, 24% for higher and additional rate. HMRC has treated crypto as property for CGT purposes since 2019. Every transaction - sale, trade to another crypto, use to buy goods - is a disposal and a taxable event. Keep detailed records of each transaction (date, proceeds, cost base, wallet/exchange). HMRC pooling rules can make the calculation complex for active traders.

Can my spouse and I combine our CGT allowances?

Yes, via transfer before disposal. Transfer an asset to your spouse or civil partner on a no-gain-no-loss basis (no CGT on the transfer itself). Each of you then has your own £3,000 AEA for the year - effectively doubling the household tax-free capacity to £6,000. You can also sell in different tax years to spread AEA use across time.

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This article is guidance only and does not constitute tax or financial advice. Rates and rules are for the 2026/27 UK tax year. For personal circumstances, consult a qualified tax adviser or HMRC directly.