Capital Gains Tax Allowance 2026/27: £3,000 AEA Explained

The capital gains tax annual exempt amount (AEA) for 2026/27 is £3,000 per individual. Gains below this threshold in a tax year are completely free from CGT. This guide explains how it works, how it was cut from £12,300, and how to make the most of it.

Last updated for the 2026/27 tax year.

What is the capital gains tax allowance?

The annual exempt amount (AEA) — also called the CGT allowance or personal CGT exemption — is the amount of net capital gains you can make in a tax year without paying any CGT. For 2026/27 it is £3,000 per individual.

Each person gets their own £3,000. Married couples and civil partners have a combined £6,000 if both make disposals. Trusts typically get £1,500, except certain disabled-person trusts which get the full amount.

The AEA is use-it-or-lose-it. Unused allowance at 5 April is permanently lost. You cannot carry it forward or transfer it to a spouse.

How the AEA has changed: 2022 to 2026

The AEA was cut by 76% in two years. An investor with £10,000 of annual gains paid nothing in 2022/23. Now they pay CGT on £7,000. At 18% that is £1,260 extra per year. At 24%, it is £1,680.

How the AEA interacts with losses

Current-year losses must be deducted from current-year gains before the AEA is applied. You cannot defer a current-year loss to preserve the AEA.

Brought-forward losses work differently. They are only applied to the extent needed to bring the net gain down to the AEA level. Excess brought-forward losses are preserved and roll forward again.

Example: gains £10,000, brought-forward losses £12,000. Apply only £7,000 of brought-forward losses to reduce the gain to £3,000 (sheltered by the AEA). Taxable gain = £0. Remaining brought-forward losses = £5,000.

This stops brought-forward losses being wasted against gains that would have been exempt anyway.

Five ways to make the most of your £3,000 allowance

1. Annual crystallisation, review your portfolio before 5 April and realise gains up to £3,000 each year. Over 10 years a couple can crystallise £60,000 of gains tax-free.
2. Bed-and-ISA, sell in your general account (using the AEA), immediately rebuy inside an ISA. Future growth is then permanently CGT-free. The 30-day rule does not apply to ISA repurchases.
3. Use your spouse's allowance, transfer an asset to your spouse (no-gain/no-loss) and let them sell it using their unused AEA. Both AEAs can be used in the same year.
4. Spread disposals across years, instead of selling all at once, sell some before 5 April and the rest after 6 April, using two years' worth of AEA.
5. Match gains with losses, if you have loss-making holdings, sell them in the same year as a larger gain to reduce the net amount above the AEA.

The AEA and the ISA wrapper

Assets inside a Stocks and Shares ISA are completely exempt from CGT. No AEA is needed. The annual ISA subscription limit is £20,000 per person for 2026/27. The key long-term move is to use the AEA to migrate holdings from a taxable general account into the ISA each year via bed-and-ISA.

Once inside the ISA, assets grow entirely free of CGT, however large they become. The AEA lets you migrate up to £3,000 of gains per person per year with no tax.

Frequently asked questions

This page is for general information only and is not tax advice. Consult a qualified tax adviser for personalised guidance.