Your £3,000 CGT Allowance Expires on April 5: The Tax-Free Gains Strategy for 2025/26

The annual exempt amount has been deliberately gutted to raise revenue:

At £12,300, most investors never thought about CGT. You could sell a decent chunk of your portfolio each year without triggering a liability. At £3,000, even modest gains push you into taxable territory.

The CGT rates from April 2025 have also been simplified — and not in investors' favour. Basic-rate taxpayers now pay 18% on all gains (residential property and other assets alike), while higher-rate taxpayers pay 24%. The distinction between property and shares has been removed. Everything is now treated the same. For a complete breakdown of CGT rates and allowances, including reliefs and reporting deadlines, see our dedicated guide.

"Bed and ISA" sounds like jargon, but the concept is straightforward: sell investments in your general account, crystallise gains within your CGT allowance, and immediately repurchase the same investments inside your ISA wrapper.

Here's why this is so valuable. Suppose you hold £50,000 of index funds in a general investment account, with £10,000 of unrealised gains. Without action, those gains will grow — and every penny above £3,000 will be taxed when you eventually sell.

By selling £50,000 now, you crystallise £10,000 of gains. The first £3,000 is exempt. The remaining £7,000 is taxable — but you only pay tax on gains actually realised. A smarter approach: sell only enough to realise £3,000 of gains (roughly £15,000 of your holding if gains are proportional), repurchase inside your ISA, and repeat next tax year.

The 30-day rule ("bed and breakfast" rule) doesn't apply to ISA transfers. You can sell in your general account and buy the identical fund in your ISA on the same day. The HMRC rules only block repurchasing in the same account type within 30 days.

For ISA guidance, see our comprehensive ISA guide and the ISA deadline strategy.

Most major platforms support bed-and-ISA as an automated process. AJ Bell, Hargreaves Lansdown, and Interactive Investor all offer a "bed and ISA" service where you select holdings in your general account and they handle the sell-and-rebuy in one transaction. Dealing charges apply — typically £5-£12 per trade — but compared to the CGT saved, this is trivial.

One nuance: if your general account holding has fallen in value, don't bed-and-ISA it. Instead, sell it to crystallise the loss (for future offset), wait 30 days, then repurchase in your ISA. This captures the loss and moves the asset into a wrapper.

With the allowance at £3,000, capital losses have become genuinely valuable. Losses can be offset against gains in the same tax year with no limit, and unused losses carry forward indefinitely.

If your portfolio includes underperforming positions, selling them before April 5 creates a tax asset. A £5,000 loss this year can offset £5,000 of gains next year — effectively giving you £8,000 of tax-free gains (£3,000 allowance + £5,000 loss offset).

Practical example: you hold a UK tech fund that's down 15% since purchase. Selling it realises the loss. After 30 days, you can repurchase the same fund (or buy a similar one immediately). The loss sits on your tax record until you need it.

Don't overlook these loss sources:

• Cryptocurrency that's fallen in value (yes, HMRC treats crypto as a chargeable asset)
• Individual shares that have underperformed
• Property that sold at below purchase price
• Failed investments you've written off mentally but never sold

Losses must be reported to HMRC within four years of the end of the tax year. For 2025/26 losses, you have until 5 April 2030 — but reporting them promptly on your Self Assessment is better practice.

The interaction between losses and the annual exempt amount matters. You must set current-year losses against current-year gains before applying the £3,000 exemption. But brought-forward losses from previous years are only applied after the exemption — meaning you use them to reduce gains below £3,000 to zero, preserving them for years when you have larger gains. This ordering rule rewards consistent annual loss harvesting.

For investors holding UK equities, see our investing hub for more on portfolio strategy.

Married couples and civil partners each get their own £3,000 allowance. Transfers between spouses are exempt from CGT — they happen at the original acquisition cost, not market value.

This creates a simple optimisation: if one partner has used their allowance and the other hasn't, transfer assets before selling. A couple can crystallise £6,000 of gains tax-free — double what an individual can achieve.

The rules changed on 6 April 2023 for separating couples. Previously, transfers remained CGT-free until the end of the tax year of separation. Now, separating spouses get up to three years from separation to make CGT-free transfers. But for couples still together, the inter-spouse transfer remains one of the most powerful CGT tools available.

For higher-rate taxpayers, the saving is concrete. £6,000 of gains at 24% CGT equals £1,440 of tax avoided. Not a fortune, but it's free money for a paperwork exercise. See our analysis on bed and ISA strategies for year-end.

With the allowance at £3,000 and unlikely to rise, CGT planning needs to become an annual habit — not something you think about when selling your second property.

The optimal strategy for investors holding assets outside tax wrappers:

Every March: Review unrealised gains across your portfolio. Sell enough to crystallise £3,000 of gains (£6,000 for couples). Repurchase inside an ISA or pension via "bed and ISA" or "bed and SIPP."

After any disposal: Check whether you have remaining allowance. If you sold buy-to-let property mid-year and used your full £3,000, don't sell shares for a gain before April 5.

Track your base cost religiously. With the allowance this small, accurate cost records are essential. Every share purchase, reinvested dividend, and equalisation payment affects your gain calculation. Most platforms provide this automatically — check your account's CGT report.

Use your pension too. "Bed and SIPP" works the same as bed and ISA, with the added benefit of pension tax relief. A higher-rate taxpayer who sells £10,000 of shares, crystallises £3,000 tax-free, and repurchases in a SIPP effectively gets 40% tax relief on the contribution as well. For more on this, see our pension carry forward guide.

Don't forget EIS and SEIS. Enterprise Investment Scheme and Seed Enterprise Investment Scheme investments offer CGT deferral and exemption respectively. If you've realised a large gain elsewhere — say from selling a buy-to-let property — reinvesting in EIS-qualifying companies defers the CGT liability. The gain becomes payable only when you sell the EIS shares (or after a set period). It's not suitable for everyone, and the underlying investments carry significant risk, but for investors who already face a CGT bill, it's worth evaluating.

Consider the timing of property disposals. If you're planning to sell a second property, timing the completion to fall after 6 April could give you a fresh £3,000 allowance. On a £50,000 gain, that saves £720 at the 24% rate. Combined with your spouse's allowance, you'd save £1,440 — enough to cover the solicitor's fees. Report any residential property gains to HMRC within 60 days of completion.

For broader tax planning strategies, visit our tax hub and our guide to pension carry forward.