A few years ago, Capital Gains Tax was something most ordinary people barely thought about — it felt like a landlord’s problem, or something for people with a serious share portfolio. That’s genuinely not the case anymore. The tax-free allowance has been cut so sharply, so quickly, that a perfectly normal share sale, a small crypto cash-out, or a second property with an unremarkable profit can now land you with a tax bill that would have been unthinkable in 2022. If you’ve sold anything for more than you paid for it recently, this is worth ten minutes of your time.
Here’s what’s actually changed, what you’re likely to owe under the current rules, and — more usefully — the legitimate ways to bring that bill down.
Quick Answer: Capital Gains Tax in the UK
For 2025/26 and 2026/27, every individual has a £3,000 Annual Exempt Amount — gains above that are taxed at 18% for basic-rate taxpayers or 24% for higher and additional-rate taxpayers, and these rates now apply equally across shares, funds, crypto, and residential property since they were aligned in the October 2024 Budget. Business Asset Disposal Relief gives a reduced rate on qualifying business sales, but that rate has just gone up — from 14% to 18% from 6 April 2026, on the first £1 million of lifetime gains. Legal ways to cut what you owe include using your full £3,000 allowance every year rather than letting gains pile up, transferring assets to a spouse before selling to access a second allowance, holding investments inside an ISA or pension where gains are entirely tax-free, and offsetting any losses against gains in the same or future years.
What Capital Gains Tax Actually Charges You On
CGT is charged on the profit you make when you sell, gift, or otherwise dispose of an asset — not on the full sale price. Buy shares for £5,000, sell them for £8,000, and your gain is £3,000. That’s the number CGT cares about, not the £8,000 you actually received.
Unlike income tax, nothing’s deducted automatically. You’re responsible for working out whether you owe it and reporting it yourself, either through Self Assessment or, for property specifically, through a separate fast-track system we’ll get to shortly.
Assets that commonly trigger CGT: shares and funds held outside an ISA, second homes and buy-to-let property, cryptocurrency, valuable personal items worth over £6,000 (cars are excluded), and business assets. Your main home is normally exempt under Private Residence Relief, which we’ll cover properly further down.
Why the Allowance Cut Matters So Much
This is genuinely the thing to understand above everything else. Back in 2022/23, the Annual Exempt Amount sat at £12,300. It was cut to £6,000 the following year, then cut again to just £3,000 — where it’s stayed for 2024/25, 2025/26, and now 2026/27 too. That’s a drop of over 75% in the space of two tax years, and it’s the lowest the allowance has been since 1996.
What this means in practice: a gain of just £3,001
is now enough to bring you into CGT territory, where you’d previously have needed over £12,000 of profit before it mattered at all. People who sold a modest chunk of shares, cashed out a small crypto position, or sold a second property with an unremarkable profit — who’d never have given CGT a second thought a few years back — genuinely need to think about it now.
One more thing worth knowing: the allowance doesn’t carry forward. It resets every 6 April, and whatever you don’t use is simply gone — which is exactly why a lot of the legal reduction strategies below revolve around timing, rather than letting gains build up year after year and then getting hit all at once.
The Rates You’ll Actually Pay
Following the October 2024 Budget, the rates on shares, funds, and crypto were aligned with the rates that already applied to property — previously shares and funds were taxed more lightly (10%/20%) than property (18%/24%); that gap has closed entirely. For 2026/27, here’s where things stand:
| Taxpayer Band | CGT Rate (Property, Shares, Funds, Crypto) |
| Basic rate | 18% |
| Higher or additional rate | 24% |
Which rate you pay depends on your total taxable income for the year, plus the gain itself. If adding the gain to your income keeps you within the basic-rate band (up to £50,270 for 2026/27), that portion is taxed at 18%. Anything that pushes you over the threshold gets taxed at 24% instead — which means it’s entirely possible to pay both rates on a single gain, 18% on the slice that fits inside your remaining basic-rate room and 24% on the rest.
Worth noting if the timing of a sale is genuinely flexible for you: a higher-income year — a bonus, a one-off payment — can push more of a gain into the 24% band than a quieter year would. If you’ve got a meaningful gain to realise and any control over when, this is one of the few genuinely free levers available. For a clear breakdown of exactly how the basic and higher-rate bands interact with gains, LITRG’s guide to Capital Gains Tax sets it out properly without the jargon.
How the Sums Actually Work
Working out what you owe follows a specific order, and the order genuinely matters when losses are involved.
Step 1: Work out your proceeds — what you sold for, or market value if gifted.
Step 2: Deduct allowable costs — what you originally paid, plus buying, improving, and selling costs.
Step 3: Deduct any losses from the same tax year, then any losses carried forward from earlier years.
Step 4: Deduct your £3,000 Annual Exempt Amount from what’s left.
Step 5: Apply 18% and/or 24% to whatever gain remains.
The detail that catches people out: losses carried forward from previous years must be used before the Annual Exempt Amount is applied, which means if you’ve got sizeable carried-forward losses, they could effectively soak up gains that your £3,000 allowance would otherwise have covered anyway — wasting it. If this applies to you, it’s genuinely worth a conversation with an accountant about whether realising a slightly bigger gain in a particular year, to use up the loss and the allowance together, makes sense.
Do You Even Need to Report It?
Not always — but it’s not as simple as just checking whether your gain is under £3,000. If your total gains are under the £3,000 AEA AND your total proceeds are under £50,000, you generally don’t need to report anything. But if your proceeds — the sale price, not the profit — exceed £50,000, you may still need to report the disposal even if your net gain after costs is below the allowance.
For property, the deadline is much tighter than people expect: any CGT due on selling UK residential property (other than your main home) must be reported and paid within 60 days of completion — not bundled into your annual Self-Assessment. This catches a genuinely surprising number of people out, since it’s such a different process from how shares are reported.
For shares, funds, and crypto, gains go through Self-Assessment by the usual 31 January deadline following the tax year — so a gain made in 2026/27 is reported by 31 January 2028. Considerably more breathing room, and more time to plan properly.
Legal Ways to Reduce What You Owe
Use Your Allowance Every Single Year
Because the £3,000 doesn’t carry forward, crystallising small gains every year — rather than letting everything build up and disposing of it all in one go years later — is genuinely more tax-efficient over time. Just be aware of the rule preventing you selling and immediately rebuying the same shares within 30 days purely for tax purposes; within an ISA or a spouse’s account, this becomes considerably more straightforward.
Transfer Assets to Your Spouse Before Selling
Transfers between spouses and civil partners are entirely CGT-free. This opens up two genuinely useful moves. If one partner hasn’t used their £3,000 allowance, transferring part of an asset before sale means both allowances apply — effectively £6,000 tax-free between a couple. And if one partner is basic-rate and the other higher-rate, moving the asset to the lower earner before selling means the gain is taxed at 18% rather than 24% — a straightforward, entirely legal way to cut the rate simply by making sure the right person owns the asset when it’s sold.
Use Your ISA and Pension Wrapper
This is probably the single most straightforward strategy, and we’ve covered it properly in our beginner’s guide to stocks and shares ISAs: gains inside an ISA or pension are completely free of CGT, no matter how large they grow. With the £20,000 annual ISA allowance available to every UK adult, moving investments into that wrapper where possible removes them from CGT entirely, permanently.
Offset Losses — and Keep Proper Records
Allowable costs — legal fees, agent fees, stamp duty paid on purchase, the cost of genuine improvements to a property — all reduce the gain and the tax owed. Keep records from the point of purchase, not just when you sell, since reconstructing receipts years later is genuinely difficult. And if you’ve made a loss elsewhere — shares that didn’t perform — report it even without a current gain to offset, since losses can be carried forward indefinitely. A loss that’s never reported is a loss that can’t help you later.
Business Asset Disposal Relief — Now at 18%, Not 14%
If you’re selling all or part of a business, Business Asset Disposal Relief reduces the CGT rate to a flat 18% on up to £1 million of lifetime gains, regardless of your usual tax band. This relief has been getting steadily less generous — it sat at 10% for years, moved to 14% for 2025/26, and rose again to 18% from 6 April 2026. It’s still a genuinely meaningful reduction for qualifying business owners, just not the bargain it once was, which makes the timing of a business sale a more pressing conversation than it used to be. The relief requires a two-year ownership and activity test, so this is firmly a speak-to-an-accountant-well-in-advance situation, not a last-minute decision.
Frequently Asked Questions
What is the Capital Gains Tax allowance for 2026/27?
The Annual Exempt Amount remains £3,000 per individual for 2026/27, unchanged from 2025/26. This is down sharply from £12,300 in 2022/23, meaning far more ordinary disposals now attract tax than they did just a few years ago.
Do I pay the same CGT rate on shares as on property?
Yes — since the October 2024 Budget, shares, funds, crypto, and residential property all share the same rates: 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers. Previously shares were taxed more lightly than property; that distinction no longer exists.
How quickly do I need to report and pay CGT on a property sale?
Within 60 days of completion for UK residential property that isn’t your main home — a much faster deadline than the Self-Assessment process used for shares, funds, and crypto, where you have until the following 31 January.
Has Business Asset Disposal Relief changed recently?
Yes. The relief rate rose from 14% to 18% from 6 April 2026, continuing a staged increase from the 10% rate that applied until recently. It still applies to the first £1 million of qualifying lifetime gains from a business sale, but it’s a less generous relief than it was even a year ago.
Can married couples reduce their Capital Gains Tax bill?
Yes — transfers between spouses and civil partners are entirely CGT-free, which lets couples use both partners’ £3,000 allowances (effectively £6,000) before a sale, and can also shift a gain to whichever partner pays the lower tax rate, reducing the overall bill on the same disposal.
For the official current rates and reporting requirements straight from HMRC, the House of Commons Library briefing on recent CGT developments is a genuinely well-sourced, non-partisan overview of how the rules have shifted over the past few Budgets — useful if you want the full context rather than just this year’s snapshot.
Conclusion
The state of Capital Gains Tax in the UK today is that the £3,000 allowance — down from £12,300 just a handful of years ago — means a genuinely wider group of people need to think about it than ever before. A modest share sale, a second property, or a crypto cash-out that would have gone entirely unnoticed in 2022 can now produce a real tax bill.
The reassuring part is that the legal ways to reduce that bill are genuinely accessible — using your £3,000 allowance every year instead of letting gains build up, making use of transfers between spouses, prioritising the ISA and pension wrapper for new investments, and keeping proper records of costs and losses. None of it requires aggressive planning or anything remotely dubious; it’s mostly about understanding the rules well enough to use what’s already available to you. If you’re facing a significant gain — particularly from a property sale, where that 60-day deadline leaves very little room for after-the-fact thinking — talking to a qualified accountant before you sell, rather than after, is genuinely where the value lies.
Disclaimer: This article is for informational purposes only and does not constitute tax or financial advice. Capital Gains Tax rates, allowances, and reliefs are correct as of the 2026/27 tax year but are subject to change, and individual circumstances vary considerably. Always consult a qualified accountant or tax adviser, or check current guidance at gov.uk, before making decisions about selling or disposing of assets.
