Capital Gains Tax Rates 2026/27, Full Guide

The Two CGT Rate Structures

CGT in 2026/27 applies a single rate structure across all asset types. Residential property (second homes, buy-to-let, inherited property) and other assets (shares, funds, crypto, commercial property) are all taxed at 18% for gains within the basic-rate band and 24% for gains in the higher or additional-rate band. These unified rates have applied since the October 2024 Autumn Budget, when the previous lower rates for shares (10%/20%) were aligned with property. Business Asset Disposal Relief has its own reduced rate of 14% for qualifying gains up to £1,000,000 lifetime.

The rate that applies is determined by your income tax position, not a separate CGT calculation. Your other taxable income (salary, pension, rental income) fills the basic-rate band first, up to the £50,270 threshold. Any remaining basic-rate band space is then available to absorb your taxable gains at the lower rate. Gains above that remaining space are charged at the higher rate. This means a basic-rate taxpayer with a large gain will often find part of it taxed at the higher rate, gains stack on top of income.

The residential property rates of 18%/24% replaced the previous 18%/28% structure from 30 October 2024 onwards. For the 2026/27 tax year, all qualifying residential property disposals use the current 18%/24% rates throughout.

The Annual Exempt Amount, £3,000

Every individual has an annual exempt amount (AEA) of £3,000 for 2026/27. Net gains below this threshold in a tax year are completely free from CGT. The AEA is applied after losses, so if you have £8,000 of gains and £3,000 of losses, your net gain is £5,000, and the £3,000 AEA reduces the taxable gain to £2,000.

The AEA cannot be carried forward to the next tax year. If you do not make any gains in 2026/27, the £3,000 allowance is simply lost. It also cannot be transferred to a spouse, each individual has their own separate allowance. However, married couples should consider whose name an asset is held in before selling, since whichever spouse makes the disposal uses their own AEA and pays CGT at their own rate. A lower-income spouse with unused AEA and a lower CGT rate can reduce the household's total tax bill significantly.

The 60-Day Reporting Requirement for Residential Property

If you sell a UK residential property (not your main home, or one with only partial main home relief) and a CGT liability arises, you must report the gain and pay an estimate of the tax within 60 days of the completion date. This is done through HMRC's online UK property reporting service, it is separate from the annual Self Assessment process. The 60-day clock starts on the completion date, not the exchange date.

Failing to report within 60 days triggers a late filing penalty of £100 immediately, rising to £300 (or 5% of the tax due if higher) after 6 months, and a further £300 (or 5%) after 12 months. Daily penalties of £10 per day also apply after 3 months. If there is no CGT to pay, for example if the gain is within the AEA or fully covered by losses, no report is required. Non-UK resident individuals must report all UK residential property disposals through the same service, whether or not CGT is owed.

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR), previously known as Entrepreneurs' Relief, provides a reduced CGT rate of 10% on qualifying gains up to a lifetime limit of £1,000,000. For qualifying disposals on or after 6 April 2025, the BADR rate is 14% (it increased from 10% as announced in the October 2024 Budget). Check the applicable rate for your disposal date carefully.

To qualify for BADR, the most common route is shares in your personal trading company: you must hold at least 5% of the ordinary share capital and voting rights, the company must be a trading company (or the holding company of a trading group), and you must have held the shares for at least two years immediately before disposal. You must also have been an officer or employee of the company throughout that two-year period. The £1,000,000 lifetime limit is cumulative across all qualifying disposals throughout your life. Once used up, it is gone, there is no annual reset.