Capital Gains Tax in 2026/27: Rates, Allowance and What's Changed

Last updated: August 2026. Written for the 2026/27 UK tax year.

Capital gains tax (CGT) is the tax on the profit when you sell or dispose of an asset that has risen in value, such as shares, a second home, a buy-to-let or cryptocurrency. You are taxed on the gain, not the whole sale price. This guide sets out the 2026/27 rates and allowance, explains what has actually changed this year, and works through two full examples, selling shares and selling a second home, so you can see how the numbers fall out.

2026/27 capital gains tax at a glance

Since the October 2024 Budget there is a single set of CGT rates. The same 18% and 24% apply whether you are selling shares, crypto or a second property, there is no longer a separate, higher rate for residential property. For a deeper breakdown, see our full 2026/27 CGT rates guide.

What's changed for 2026/27

If you filed a return last year, most of the CGT landscape will look familiar. The 18%/24% main rates and the £3,000 annual exempt amount are both unchanged from 2025/26. The one substantive change for 2026/27 is Business Asset Disposal Relief (BADR).

BADR gives a reduced CGT rate on qualifying gains when you sell all or part of a trading business, up to a £1 million lifetime limit. Its rate has been rising in steps rather than in one jump:

So a qualifying business sale that completes in 2026/27 is taxed at 18% on the qualifying gain, up from 14% in 2025/26 and 10% two years ago. The £1 million lifetime limit and the qualifying conditions (broadly, a 5%+ holding in a personal trading company where you are an officer or employee for at least two years) are unchanged. Our BADR guide covers the conditions in full.

The £3,000 annual exempt amount and how CGT stacks on income

Before any rate is applied, you subtract the £3,000 annual exempt amount (AEA) from your net gains for the year. Net gains below £3,000 are completely free of CGT. The AEA is use-it-or-lose-it, you cannot carry it forward or hand it to a spouse, but each partner has their own £3,000, so a couple can shelter £6,000 of gains between them. The allowance has fallen sharply from £12,300 in 2022/23, which is why far more people now pay CGT on modest gains. See using your 2026/27 allowance for planning tips.

CGT is not a flat tax, it sits on top of your income. Your salary, pension and other taxable income fill the basic-rate band first (£12,570 personal allowance up to £50,270). Whatever is left of that band absorbs your taxable gain at 18%, and any gain above it is taxed at 24%. In practice:

1. Work out your taxable gain: proceeds minus cost, buying and selling costs and any losses, minus the £3,000 AEA.
2. Find your remaining basic-rate band: £50,270 minus your gross taxable income.
3. Tax the gain that fits inside that remaining band at 18%.
4. Tax any gain above the band at 24%.

Worked example: selling shares

Priya earns a salary of £45,000 and sells shares held outside an ISA for £45,000 that originally cost £25,000. Her gain is £20,000. After the £3,000 AEA, her taxable gain is £17,000.

Her remaining basic-rate band is £50,270 − £45,000 = £5,270. So the first £5,270 of the gain is taxed at 18% = £948.60, and the remaining £11,730 is taxed at 24% = £2,815.20. Her CGT bill is about £3,764. If she had instead held the shares inside an ISA, or spread the sale across two tax years to use two £3,000 allowances, the bill would have been lower. Our CGT on shares guide explains share-matching (Section 104) pooling and the 30-day rule.

Worked example: selling a second home

Tom is a higher-rate taxpayer earning £60,000. He sells a second home for £300,000 that he bought for £220,000. He paid £8,000 in Stamp Duty and legal fees on purchase, spent £12,000 on a qualifying extension, and paid £5,000 in estate agent and legal fees on the sale.

His gain is £300,000 − £5,000 selling costs − (£220,000 + £8,000 + £12,000) = £55,000. After the £3,000 AEA, the taxable gain is £52,000. Because his £60,000 salary already fills the basic-rate band, there is no 18% band left, so the whole gain is taxed at 24% = £12,480.

Crucially, Tom must report the sale and pay the £12,480 within 60 days of completion, he cannot wait until his Self Assessment return. See CGT on a second home for how private residence relief and periods of occupation can reduce a property gain.

The 60-day property reporting rule

When you sell a UK residential property and CGT is due, you must report the gain and pay the tax within 60 days of completion using HMRC's online UK Property Account. This is separate from, and earlier than, your annual Self Assessment return. Miss the deadline and HMRC charges an automatic £100 penalty, with further penalties and interest if it runs on. Gains on shares, crypto and other non-property assets are reported the normal way through Self Assessment by 31 January after the tax year ends. Our reporting deadline guide walks through the process.

Frequently asked questions

Official sources

• GOV.UK, Capital Gains Tax rates
• HMRC, CGT rates and allowances
• GOV.UK, report and pay Capital Gains Tax

This page is for general information only. Rates and rules change, always verify with HMRC or a qualified tax adviser for your specific situation.