£3,000 CGT Allowance Vanishes on 5 April — 7 Moves to Make Before It Does

The CGT annual exempt amount has been slashed dramatically since 2022:

In 2022/23, you could realise £12,300 of gains tax-free. Today, the same activity triggers a tax bill on everything above £3,000. That's a 75.6% reduction in three steps. The government didn't announce this as a tax rise — but that's precisely what it is.

A basic-rate taxpayer selling shares with a £12,300 gain paid zero CGT in 2022/23. The same gain in 2025/26 costs £1,674 in tax at the current 18% rate. A higher-rate taxpayer faces a £2,232 bill at 24%.

The rates themselves changed from 6 April 2025. Gains on most assets now attract 18% (basic rate) or 24% (higher rate), according to HMRC's published rates. The old 10%/20% split on non-property assets is gone. Residential property gains remain at 18%/24%, and Business Asset Disposal Relief sits at 14%. Our full CGT guide covers all the rates, reliefs, and reporting deadlines in detail. For anyone with unrealised gains in a general investment account, year-end action is no longer optional — it's the difference between paying tax and not paying tax.

The simplest strategy: sell investments showing gains up to £3,000, crystallise the profit tax-free, then repurchase. The 30-day bed and breakfast rule (Section 106A TCGA 1992) prevents you buying the identical shares back within 30 calendar days in a taxable account. But you have three alternatives:

• Buy a different fund tracking the same index — sell a FTSE 100 tracker, buy a FTSE All-Share tracker. Same market exposure, different security, no matching issue.
• Have your spouse buy the same holding immediately (inter-spouse transfers are CGT-neutral).
• Repurchase inside an ISA wrapper. This is the power move: you reset your cost base AND move the asset into permanent tax shelter.

The third option does double duty. You're using your £20,000 ISA allowance to shelter future growth forever while crystallising this year's CGT-free gains. Two allowances, one set of transactions.

Transfers between spouses and civil partners are CGT-free under HMRC inter-spouse transfer rules. The receiving spouse inherits the original cost base — but they get their own £3,000 allowance to deploy independently.

A couple can therefore realise £6,000 of gains this tax year without paying a penny in CGT. If one partner holds a concentrated portfolio with large unrealised gains, transferring half before 5 April doubles the tax-free disposal capacity. The maths is straightforward:

• Partner A holds shares with £10,000 of unrealised gains
• Partner A transfers half to Partner B (no CGT charge on transfer)
• Partner A sells their remaining shares, crystallising £5,000 gain, £3,000 covered by allowance, £2,000 taxable
• Partner B sells their transferred shares, crystallising £5,000 gain, £3,000 covered by their allowance, £2,000 taxable
• Combined taxable gain: £4,000 instead of £7,000 — saving £540-£720 depending on tax band

One warning: the transfer must be genuine, and HMRC can challenge arrangements where the transferring spouse retained effective control. The safest approach is to transfer the assets, allow a reasonable period, and then the receiving spouse independently decides to sell.

If your portfolio has losers alongside winners, this is the moment to crystallise those losses. Capital losses can offset gains in the same tax year with no limit — and unlike the annual exempt amount, unused losses carry forward indefinitely under HMRC loss relief rules.

Say you have £8,000 of gains and £4,000 of losses sitting unrealised in your portfolio. Without action, your taxable gain after the £3,000 allowance is £5,000. Crystallise the £4,000 loss by selling, and your net gain drops to £4,000 minus the £3,000 allowance = £1,000 taxable. That's a saving of £720 at the basic rate or £960 at the higher rate.

Review your portfolio methodically. Every holding trading below your purchase price is a potential loss-harvesting candidate. Even a partial sale to crystallise a paper loss can reduce your CGT bill this year. You can repurchase the same shares after 30 days if you still want the exposure — the bed and breakfast rule applies to losses too.

A subtlety: you must use current-year losses before applying the annual exempt amount. You can't choose to carry losses forward if using them this year would waste your £3,000 allowance. Plan the sequence carefully.

The £20,000 ISA allowance and your CGT allowance work beautifully together. Sell a holding outside your ISA (using your £3,000 CGT exemption), then repurchase inside a stocks and shares ISA.

All future gains, dividends, and interest within the ISA are permanently tax-free — no CGT, no income tax, no dividend tax. You're not just saving £540-£720 this year. You're eliminating CGT on that holding for every year you hold it.

Consider the long-term impact: an investment growing at 7% annually doubles in roughly 10 years. A £10,000 holding inside an ISA grows to £20,000 with zero CGT. Outside an ISA, that £10,000 gain attracts £1,260-£1,680 in tax after the allowance. The ISA advantage compounds — the tax you don't pay this year stays invested and generates its own tax-free returns.

With the ISA deadline also on 5 April, this is a genuine two-for-one opportunity. Our ISA guide covers the full range of wrapper options, including the best stocks and shares ISA providers if you need a new account.

If you're sitting on gains larger than £3,000, split the sale across 5 and 6 April. Sell enough to use this year's £3,000 allowance before midnight on 5 April. Sell the next tranche on 6 April to use the 2026/27 allowance (expected to remain at £3,000 based on the government's published frozen thresholds).

Two tax years, two allowances, £6,000 of tax-free gains for a single investor. For a couple doing the same, that's £12,000 — still the equivalent of one year's allowance back in 2022/23.

The risk: market movement between your two sales. If you're selling shares, the price on 6 April could differ materially from 5 April — particularly if markets react to weekend news. For holdings above £50,000, consider whether the tax saving justifies the execution risk. For most retail investors, the answer is yes: a £6,000 straddle saves £1,080 at basic rate.

If you're charitably inclined, gifting appreciated assets directly to a registered charity eliminates CGT entirely — you don't even need the £3,000 allowance. You can also claim income tax relief on the market value of the gift through Gift Aid.

This is materially more tax-efficient than selling, paying CGT, and donating the cash proceeds. A higher-rate taxpayer donating shares worth £10,000 with a £5,000 gain saves £480 in CGT (24% on £2,000 above the allowance) and gets £4,000 in income tax relief at 40%. Total tax benefit: £4,480 on a £10,000 donation.

Contact your broker to arrange an in-specie transfer to the charity. Most major platforms — Hargreaves Lansdown, AJ Bell, Fidelity — support this, though the process typically takes 2-4 weeks. Start now if you want it completed before 5 April.

Before executing any of the moves above, verify your acquisition costs. Platform records are often incomplete, especially for shares purchased before 2008, transferred between providers, or acquired through employer share schemes.

Dividend reinvestment plans add to your cost base but are frequently missed — every reinvested dividend increases your acquisition cost and reduces your eventual CGT liability. If you've held funds that merged or restructured, your cost base may have changed. Corporate actions — share splits, rights issues, demergers — all affect your acquisition cost in non-obvious ways.

Get this wrong and you'll either overpay CGT (most common — HMRC won't refund you proactively) or underpay and face an HMRC enquiry. Log into your platform, download your complete transaction history, and calculate your actual gain before executing any sales. For holdings acquired before your current platform's records began, check old contract notes or annual tax statements.

The tax planning section of our site covers related topics including buy-to-let tax changes and tax code explanations.

This article is for informational purposes only and does not constitute financial advice. Capital gains tax planning involves complex rules and individual circumstances vary. You should consult a qualified financial adviser or tax professional before making investment decisions based on tax considerations.