What Is Capital Gains Tax UK? 2026 Rates and How to Reduce It
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Chandraketu Tripathi
Finance Editor, Kaeltripton
Published3 Apr 2026
Last reviewed18 Apr 2026
✓ Fact-checked
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UK Tax Guide — April 2026
Capital Gains Tax (CGT) is paid on the profit you make when you sell or dispose of an asset that has increased in value. You do not pay CGT on the full sale price — only on the gain (the profit above what you paid for it).
UK Capital Gains Tax Rates 2026/27
Asset Type
Basic Rate Taxpayer
Higher Rate Taxpayer
Residential property
18%
24%
Other assets (shares funds etc)
18%
24%
Business assets (BADR)
10%
10%
Inside ISA or pension
0%
0%
The Annual CGT Allowance 2026/27
Every UK resident gets an annual CGT exempt amount of £3,000 per tax year. You only pay CGT on gains above this threshold. The allowance has been cut dramatically — from £12,300 in 2022/23 to just £3,000 today.
CGT Examples — How Much Will You Pay?
Gain
Basic Rate Taxpayer
Higher Rate Taxpayer
£3,000 or less
£0 — within allowance
£0 — within allowance
£5,000
£360 (18% on £2,000)
£360 (18% on £2,000)
£10,000
£1,260 (18% on £7,000)
£1,680 (24% on £7,000)
£20,000
£3,060 (18% on £17,000)
£4,080 (24% on £17,000)
£50,000
£8,460 (18% on £47,000)
£11,280 (24% on £47,000)
How to Reduce Capital Gains Tax
Use your full ISA allowance — gains inside an ISA are always CGT-free
Transfer assets to your spouse before selling — they get their own £3,000 allowance
Use your annual allowance every year — you cannot carry it forward
Sell assets over two tax years to use two annual allowances
Claim losses — losses from other asset sales can offset gains
Consider Business Asset Disposal Relief if selling a business — 10% rate
Make pension contributions to reduce your adjusted net income if near higher rate threshold
Bottom line: CGT rates rose to 18% and 24% from October 2024 and the annual allowance has been slashed to £3,000. The single most effective strategy is using your ISA allowance — all gains inside an ISA are permanently CGT-free. Transfer assets to a spouse before selling to double your effective allowance.
The content on Kaeltripton.com is for informational and educational purposes only and does not constitute financial, investment, tax, legal or regulatory advice. Kaeltripton.com is not authorised or regulated by the Financial Conduct Authority (FCA) and is not a financial adviser, mortgage broker, insurance intermediary or investment firm. Nothing on this site should be construed as a personal recommendation. Rates, figures and product details are indicative only, subject to change without notice, and should always be verified directly with the relevant provider, HMRC, the FCA register, the Bank of England, Ofgem or other appropriate authority before any financial decision is made. Past performance is not a reliable indicator of future results. If you require regulated financial advice, please consult a qualified adviser authorised by the FCA.
CT
Chandraketu Tripathi
Finance Editor · Kaeltripton.com
Chandraketu (CK) Tripathi, founder and lead editor of Kael Tripton. 22 years in finance and marketing across 23 markets. Writes on UK personal finance, tax, mortgages, insurance, energy, and investing. Sources: HMRC, FCA, Ofgem, BoE, ONS.
