Capital Gains Tax UK 2026/27: Rates, Allowances and How to Pay Less

From 6 April 2026, the Capital Gains Tax rates are:

The annual exempt amount is £3,000 per individual, £1,500 for trusts.

Three things to notice. One: the basic and higher rate spread is now just 6 percentage points (18% vs 24%) — the smallest gap in modern CGT history. Two: BADR at 18% offers nothing to basic rate taxpayers; its sole value is the 6-point saving for higher rate taxpayers. Three: Investors' Relief at 10% is now 8 points cheaper than BADR — if you qualify, it's the best rate in the code.

Your CGT rate depends on your total taxable income plus the gain. The basic rate band for 2026/27 is £37,700 (income up to £50,270 including the £12,570 personal allowance). If adding the gain to your taxable income pushes you above the threshold, the portion above is taxed at 24%.

CGT is charged on the gain, not the sale price:

Sale proceeds − Purchase price − Allowable costs − Annual exempt amount = Taxable gain

Allowable costs include stamp duty on purchase, solicitor and estate agent fees, and improvement costs — a new kitchen counts, repainting does not. For shares, deduct dealing charges and the original purchase cost.

A real 2026/27 example. A buy-to-let flat bought for £200,000 in 2017, sold for £320,000 in May 2026. Allowable costs: £1,500 stamp duty, £3,000 combined legal fees, £18,000 for a kitchen, bathroom refit, and boiler replacement. The calculation:

£320,000 − £200,000 − £22,500 = £97,500 gain

£97,500 − £3,000 exempt amount = £94,500 taxable

A higher rate taxpayer pays 24%: £22,680. For comparison, under the old £12,300 allowance and 28% property rate (2023/24), the bill would have been £23,856 on £85,200 taxable. The allowance cut alone cost this seller £2,232 — even though the rate dropped from 28% to 24%.

For shares, HMRC uses the Section 104 holding rule: if you bought shares in the same company at different times, your cost basis is the weighted average of all purchases. The 30-day 'bed and breakfasting' rule means selling and rebuying the same shares within 30 days matches the repurchase to the sale — the gain or loss is deferred. This rule does not apply when moving shares into an ISA. See our ISA guide for the Bed and ISA mechanics.

A frozen £3,000 allowance in an inflationary world is a real-terms cut every year. At 2.5% inflation, the allowance loses £75 of purchasing power annually — and there is no mechanism to restore it.

HMRC treats cryptoassets as property for CGT purposes. That means every disposal — selling for GBP, trading one token for another, spending crypto on goods, even gifting it (except to a spouse) — is a taxable event.

The rules are unforgiving:

• Crypto-to-crypto trades crystallise gains. Swap ETH for BTC and you've disposed of ETH at its GBP market value at that moment. You owe CGT on the gain even if no GBP ever touched your bank account.
• The 30-day share matching rule applies to crypto too. Sell Bitcoin and rebuy within 30 days, and HMRC matches the repurchase to the disposal — the gain is deferred, not eliminated.
• Same-day rule comes first. If you buy and sell the same token on the same day, those transactions are matched before the 30-day rule or the Section 104 pool.
• Staking and airdrop rewards may trigger Income Tax at receipt, with CGT on any subsequent disposal — the cost basis for staking rewards is their market value when received.
• DeFi transactions — providing liquidity, wrapping tokens, bridging assets — can each trigger a disposal depending on the mechanism. HMRC's cryptoassets manual is increasingly prescriptive.

The reporting burden is heavy. An active DeFi user in 2021-22 could easily have generated hundreds of taxable events. Pooling rules (Section 104) help with fungible tokens, but NFTs are individually identifiable — each one has its own cost basis and disposal calculation.

One planning point: crypto losses are as real as share losses. If you held through the 2025-26 corrections, you may be sitting on unrealised losses. Harvesting those — selling, banking the loss, and rebuying after 30 days — creates a CGT shield for other gains. But the 30-day wait exposes you to price movement. For more on loss harvesting mechanics, see strategy 4 below.

If this sounds painful, there's a simple fix: use your ISA allowance. Crypto isn't ISA-eligible directly, but the £20,000 you put into an ISA each year permanently removes that capital from the CGT net — freeing up your annual exempt amount for the crypto gains you can't shelter.

Private Residence Relief: Your main home is exempt from CGT. If you lived in it for part of ownership before letting it out, you get proportional relief. The final 9 months of ownership are always treated as residence. This relief is automatic.

Lettings Relief: Up to £40,000 — but you must have been in shared occupation with the tenant. Since April 2020, this means you lived alongside a lodger. A landlord who never lived in the property cannot claim this. In practice, Lettings Relief is now nearly extinct.

Business Asset Disposal Relief: Now 18% on qualifying gains up to a £1 million lifetime cap. You must have held qualifying status for at least two years. Covers sales of your trading business, shares in your personal trading company (5%+ holding), or partnership interests. The rate is now identical to the basic CGT rate — if you're already a basic rate taxpayer, BADR offers no advantage. The value proposition is solely for higher/additional rate taxpayers: 18% instead of 24%.

Investors' Relief: 10% on gains from unlisted trading company shares up to £1 million lifetime. Shares must be held for 3+ years and issued after 17 March 2016. You don't need to be an employee — this is the relief for arm's-length investors. With BADR now at 18%, Investors' Relief at 10% is the most valuable rate in the CGT code.

ISAs and pensions: Gains within ISA wrappers and pension schemes are completely exempt — no CGT, no reporting, no limit on the gain. Your £20,000 annual ISA allowance is your primary defence against the CGT rate regime. Our recent coverage of the Cash ISA allowance debate explains why the allowance itself is under political pressure.

Spousal transfers: Transfers between married couples and civil partners are CGT-free at the point of transfer. The receiving spouse inherits the original cost basis. This is the foundation of several planning strategies below.

Gifts to charity: Disposed of at nil gain/nil loss — no CGT payable.

UK residential property: You must report and pay within 60 days of completion through HMRC's online CGT service. HMRC charges a £100 late filing penalty immediately — this escalates at 6 and 12 months. Interest accrues from day 61.

This continues to catch people out. The conveyancer transfers the proceeds, and six weeks later a penalty notice arrives because nobody mentioned the 60-day rule. The clock runs from completion, not exchange — a chain delay that pushes exchange and completion apart can eat most of your 60 days before you even have the money.

All other assets (shares, funds, crypto, personal possessions, business assets): Report on your self-assessment return by 31 January 2028 for 2026/27 gains. If you don't normally file self-assessment, register with HMRC by 5 October 2027.

Losses: Report within four years of the end of the tax year in which they occurred. Unused capital losses carry forward indefinitely — but only if reported. A loss you don't report is a loss you can't use. For 2026/27 losses, the deadline is 5 April 2031.

After the Iran-conflict market volatility through spring 2026, many portfolios contain unrealised losses. Harvesting these — selling the underwater positions and booking the loss — is the single most underused CGT planning move.

With the exempt amount at £3,000 and rates at 18%/24%, planning is structural, not annual. Here are the strategies that move real money:

1. Bed and ISA — the most important move you can make. Sell investments in a taxable account, rebuy within your ISA. This crystallises the gain (ideally within your £3,000 exemption) and shelters all future growth permanently. The 30-day rule does not apply to ISA transfers. Do this quarterly, not just at year-end — small, regular crystallisations stay under the allowance far more reliably than one December panic-sell.

2. Use both spouses' allowances. Each person gets £3,000. Transfer assets between spouses (CGT-free), then each crystallises gains within their own exemption. Household allowance: £6,000. At 24%, that saves £1,440 annually versus using one allowance.

3. Split disposals across tax years. Sell part of a holding in March, the rest in April. Two annual exemptions (£6,000 total) instead of one. At 24%, that's an extra £720 saved.

4. Harvest losses aggressively. Scan your portfolio for underwater positions. Sell the losers, bank the loss, rebuy something similar but not identical (to avoid the 30-day rule). A £10,000 loss offsets £10,000 of gains, saving £2,400 at the higher rate. Losses also carry forward — building a loss bank in volatile years creates a CGT shield for profitable years. After the Iran-conflict drawdown and the persistent gilt market turbulence (see our gilts analysis), this is a particularly live opportunity.

5. Pension contributions to drop your rate. A large pension contribution reduces taxable income. Push yourself from higher rate into basic rate and your CGT rate drops from 24% to 18%. On a £50,000 gain, that's a £3,000 saving. We covered the mechanics in detail in our salary sacrifice deep-dive.

6. Gift to the lower-rate spouse before selling. If one spouse is a basic rate taxpayer, transfer the asset to them (CGT-free). They sell at 18% instead of your 24%. On £100,000 of gains, that saves £6,000.

7. Hold until death. The CGT uplift on death wipes out all unrealised gains. Beneficiaries inherit at the probate value with no CGT to pay. Inheritance Tax may apply, but CGT does not. For older investors with large unrealised gains, deliberate non-selling can be the most tax-efficient strategy. But this only works if IHT isn't the bigger problem — see our guide to the IHT threshold freeze.

None of these strategies are aggressive. They are basic hygiene in a regime where the tax-free shelter has shrunk from £2,460 (2022/23) to £720 (2026/27) for a higher-rate taxpayer using the annual exempt amount alone.

Mistake 1: Not reporting a loss. A capital loss you don't declare within four years disappears forever. If you sold at a loss in 2022/23, you have until 5 April 2027 to report it. After that, it's gone — and you can't offset it against future gains.

Mistake 2: Ignoring the 30-day rule on share repurchases. Sell Barclays at a loss on 10 March, rebuy on 25 March — the loss is disallowed. Wait 31 days, and it's clean. This trips up DIY investors constantly.

Mistake 3: Assuming crypto gains are invisible. HMRC receives data from UK exchanges. The compliance yield from crypto enquiries has risen sharply since 2025. The penalties for non-disclosure start at 30% of the tax due for 'careless' behaviour and reach 100% for deliberate concealment.

Mistake 4: Double-counting the personal allowance in rate calculations. The £12,570 personal allowance reduces your income for Income Tax purposes, but when calculating which CGT band applies, the threshold is your taxable income plus gains measured against £50,270. Some taxpayers mistakenly think they get £12,570 + £37,700 = £50,270 of basic rate room for CGT — they don't. The £12,570 is already inside the £50,270.

The government made no CGT changes in the Spring Statement 2026. But the political pressure to align CGT rates with Income Tax has not disappeared. The think-tank consensus — IFS, Resolution Foundation, and the Treasury's own modelling — converges on a 30-40% CGT rate range as 'revenue-optimal'.

Three specific risks to watch:

Alignment with Income Tax. The simplest reform — tax gains at 20%/40%/45% to match income. For a higher-rate taxpayer, the effective CGT rate would nearly double from 24% to 40%. The window to crystallise gains at 24% might not outlast this parliament.

Further allowance cuts. The £3,000 allowance has no inflation mechanism and no political constituency defending it. A cut to £1,000 or outright abolition — recommended by the Office of Tax Simplification before its closure — remains live. At £1,000, a higher-rate taxpayer would shield just £240 of tax annually.

Rebasing on death. Removing the CGT uplift on death would create a combined IHT + CGT charge on inherited assets. Combined with the IHT threshold freeze, this would devastate family businesses and second homes passed between generations.

The practical response to reform risk: accelerate the movement of assets into ISAs and pensions. Every year you use your £20,000 ISA allowance, you permanently remove £20,000 of capital from the CGT net. Over a decade, that's £200,000 of principal — plus all future gains — permanently sheltered. Delaying costs more than it ever has.