TL;DR
Capital Gains Tax (CGT) rates for 2026/27: 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers on all asset types including property and shares. The Annual Exempt Amount is 3,000 pounds - down from 12,300 pounds in 2022/23. Residential property gains must be reported within 60 days of completion.
Last reviewed: 23 June 2026
Key Facts: Capital Gains Tax 2026/27
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What is Capital Gains Tax?
Capital Gains Tax is charged on the profit made when a chargeable asset is sold or disposed of at a higher value than it was acquired for. Only the gain - not the full sale price - is taxed. The Annual Exempt Amount (3,000 pounds in 2026/27) is deducted from the total net gain before tax is calculated.
CGT does not apply to the sale of a main residence (covered by Private Residence Relief), assets held inside an ISA or pension, personal vehicles, or transfers between spouses and civil partners.
CGT Rates 2026/27: By Asset Type and Taxpayer Band
| Asset Type | Basic Rate (20% income band) | Higher/Additional Rate |
|---|---|---|
| Residential property (not main home) | 18% | 24% |
| Shares, funds and ETFs | 18% | 24% |
| Cryptocurrency | 18% | 24% |
| Business assets (BADR qualifying) | 18% (up to 1m lifetime) | 18% (up to 1m lifetime) |
| Trusts and personal representatives | 24% | 24% |
Rates apply from 6 April 2026. Main residence exempt via Private Residence Relief. Source: GOV.UK.
How to calculate Capital Gains Tax
Step 1: Calculate the total gain from all disposals in the tax year (proceeds minus allowable costs including purchase price, dealing fees, and improvement costs).
Step 2: Deduct allowable losses from the same or previous tax years.
Step 3: Deduct the Annual Exempt Amount of 3,000 pounds.
Step 4: Add the remaining taxable gain to total taxable income. The portion that falls within the unused basic-rate band (income up to 50,270 pounds) is taxed at 18%. The remainder is taxed at 24%.
CGT Worked Examples 2026/27
| Scenario | Annual Income | Gain | Tax-Free AEA | Taxable Gain | CGT Due |
|---|---|---|---|---|---|
| Basic-rate, shares sold | 30,000 | 10,000 | 3,000 | 7,000 | 1,260 (18%) |
| Higher-rate, shares sold | 70,000 | 10,000 | 3,000 | 7,000 | 1,680 (24%) |
| Basic-rate, second property | 30,000 | 30,000 | 3,000 | 27,000 | 4,860 (18%) |
| Mixed rates, property | 45,000 | 20,000 | 3,000 | 17,000 | 918 at 18% + 912 at 24% = 1,830 |
Examples assume no prior-year losses. Figures illustrative. Consult a tax adviser for your position.
The 60-day rule for residential property
When a UK residential property that is not the seller main home is sold at a gain, the Capital Gains Tax must be reported and paid to HMRC within 60 days of the legal completion date. This is done through HMRC Capital Gains Tax on UK property account (separate from Self Assessment). Missing this deadline triggers an immediate 100 pound penalty plus daily interest on the unpaid tax.
The gain must also be declared in the annual Self Assessment return, with credit given for any CGT already paid through the 60-day report.
Business Asset Disposal Relief
Business Asset Disposal Relief (BADR), formerly known as Entrepreneurs Relief, applies a 18% CGT rate to qualifying business gains up to a lifetime limit of 1 million pounds. The rate was 10% until 2024/25, rose to 14% in 2025/26, and is now 18% from April 2026. To qualify, the seller must have owned the business or held at least 5% of shares and voting rights for at least two years.
How to reduce Capital Gains Tax legally
- Use the Annual Exempt Amount each year - it cannot be carried forward
- Transfer assets between spouses before disposal - each partner has their own 3,000 pound AEA
- Hold investments inside an ISA - all gains permanently exempt
- Contribute gains to a pension - pension contributions reduce adjusted net income
- Carry forward capital losses - report losses to HMRC within four years of the tax year they arise
- Time disposals across tax years to use two Annual Exempt Amounts
What is the Capital Gains Tax rate in 2026/27?
18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers on all chargeable assets including residential property, shares and cryptocurrency. These rates apply from 6 April 2026 and were introduced following the October 2024 Budget.
What is the CGT Annual Exempt Amount in 2026/27?
3,000 pounds per individual. This is the lowest in the scheme history, reduced from 12,300 pounds in 2022/23. Unused exemption cannot be carried forward to the next tax year.
When do I need to report a Capital Gain?
Gains on residential property (not the main home) must be reported and paid within 60 days of completion. All other gains (shares, crypto, business assets) are reported through the annual Self Assessment return, due by 31 January following the tax year end.
Do I pay CGT when I sell my home?
Normally no. The main residence is exempt from CGT under Private Residence Relief, provided it has always been used as the main home. Partial relief applies if the property was let out or used for another purpose during ownership.
Is CGT paid inside an ISA?
No. All gains made inside an ISA are permanently exempt from CGT. This applies regardless of the size of the gain or the type of investment held in the ISA.
What is Business Asset Disposal Relief?
Business Asset Disposal Relief (BADR) is a reduced CGT rate of 18% that applies to qualifying business asset sales up to a lifetime limit of 1 million pounds. It applies to sole traders, partners and qualifying company directors who have held the business for at least two years.
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