Guide

Capital Gains Tax for Basic-Rate Taxpayers 2026/27

Written by James Whitfield · Updated August 2026 Checked against 2026/27 HMRC rates

Here is the bit that catches people out: being a basic-rate taxpayer on your salary does not mean your whole gain is taxed at 18%¹. Your gain stacks on top of your income, and only the slice that fits in your leftover basic-rate band gets 18%. Anything above the £50,270 line tips into 24% - even for someone who has never paid higher-rate tax on their wages. A big enough gain can be mostly 24%.

Key takeaways

Basic-rate CGT is 18%, but only on the gain that fits below £50,270 of total income; the rest is 24%.¹
The first £3,000 of gains each year is tax-free - the annual exempt amount.²
Your income is measured first, then the gain sits on top - so a modest salary leaves more room at 18%.³
A pension contribution can pull part of a gain back down to 18%, worth £60 per £1,000 shifted.
Scottish income tax bands do not change this - CGT uses the UK £50,270 threshold everywhere.

How the band split actually works

CGT treats your gain as sitting on top of your other taxable income. Income fills the bands first. Whatever headroom is left - the gap between your taxable income and £37,700 of taxable income (which is £50,270 gross) - absorbs gain at 18%. Any gain above that headroom is charged at 24%.³

So a basic-rate taxpayer with a large enough gain will pay 24% on part of it. The 18% rate only ever applies to the portion that fits the remaining band - and once your salary alone reaches £50,270, there is no 18% room left at all.

The figures for 2026/27

Personal allowance: £12,570 - income below this is free of income tax
Basic-rate band: £37,700 of taxable income, taking you to £50,270 gross
Annual exempt amount: £3,000 of gains, tax-free²
CGT lower rate: 18% (gain within the remaining basic-rate band)
CGT higher rate: 24% (gain above the basic-rate band)

Since the October 2024 Budget these two main rates apply to shares, funds, crypto, residential property and most other assets.¹ The old 28% property rate is gone.

Worked example: the £28,000 share gain

Tom earns £47,570, so after his £12,570 personal allowance his taxable income is £35,000. He sells shares for a £28,000 gain. On paper he is a basic-rate taxpayer - but watch how little of the gain gets 18%:

Worked example — basic-rate taxpayer, £28,000 share gain

Salary	£47,570
Taxable income (after £12,570 allowance)	£35,000
Basic-rate band runs to £37,700 of taxable income, so only £2,700 is left for the gain	£2,700 at 18%
Share gain	£28,000
Less annual exempt amount	−£3,000
Taxable gain	£25,000
£2,700 taxed at 18%	£486
£22,300 taxed at 24%	£5,352
CGT due	£5,838

Tom is a basic-rate taxpayer on his salary, yet more than nine-tenths of his CGT is at 24% - because his wages leave almost no basic-rate band for the gain to fall into.

A lower salary changes everything

Claire earns £30,000 gross, so her taxable income is £17,430. She sells a rental property with a £25,000 taxable gain (already net of the £3,000 exempt amount). Her remaining basic-rate band is £37,700 − £17,430 = £20,270, so most of the gain lands at 18%: £20,270 at 18% is £3,649, and the last £4,730 at 24% is £1,135 - a total of £4,784. Same size of gain as Tom's, a much smaller bill, purely because Claire's lower income leaves more 18% room.

Can a pension contribution cut the rate?

Yes - it is the one lever most people have. A personal pension contribution (or a Gift Aid gift) extends your basic-rate band by the grossed-up amount, reopening room for gain at 18% instead of 24%. If Tom paid £4,000 into a personal pension (£5,000 gross once basic-rate relief is added), his band would stretch so that £7,700 of his gain fell at 18% rather than just £2,700. That extra £5,000 at 18% instead of 24% saves £300 - on top of the income-tax relief on the contribution itself. Our guide to pension contributions and CGT covers the limits and timing.

Mind the annual allowance (normally £60,000, or 100% of your earnings if lower). Check you have the headroom before you pay in.

Am I a basic-rate taxpayer for CGT?

Broadly, if your gross income - salary, self-employment profit, rental income - sits between £12,571 and £50,270, you are a basic-rate taxpayer. But for CGT the only number that matters is how much of that £50,270 your income has already used. The smaller your income, the bigger the 18% slice you get.

Two quick traps. Dividends have their own bands and rates, so factor those into your income first. And Scottish income tax bands make no difference here - CGT is set UK-wide and uses the £50,270 basic-rate limit whether you live in Glasgow or Guildford.

Calculate your exact CGT split

Enter your taxable income and gain to see exactly how much falls at 18% and how much at 24%.

Open the CGT calculator

Frequently asked questions

Am I a basic-rate taxpayer for CGT purposes?

If your gross income is between £12,571 and £50,270, you are a basic-rate taxpayer on income. For CGT, what matters is how much of your basic-rate band (£37,700 of taxable income) is unused after your income is counted. That remaining headroom is the amount of gain you can tax at 18%; anything above it is 24%.

Can a large gain be taxed at 24% even though I am basic-rate?

Yes, and this is the most common surprise. Your gain stacks on top of your income. Once the combined total passes £50,270, every further pound of gain is charged at 24% - regardless of the fact that your salary alone never reached the higher-rate threshold. A big one-off gain can therefore be mostly at 24%.

Can I reduce my income to keep more of my gain at 18%?

Potentially. Pension contributions and Gift Aid donations both extend your basic-rate band, creating more room for the gain at 18%. Spreading disposals across two tax years also helps, because each year brings a fresh £3,000 exempt amount and a fresh set of bands. For larger gains it is worth modelling with an adviser.

Does a pension contribution reduce CGT directly?

Not directly - it works through the band. A contribution widens your basic-rate band, so more of your gain falls at 18% rather than 24%. Every £1,000 of gain moved from 24% to 18% saves £60 (the six-percentage-point difference).

Do Scottish income tax rates affect my CGT?

No. CGT is a UK-wide tax and uses the UK basic-rate limit of £50,270 to work out the 18%/24% split - not the Scottish income tax bands. Scottish taxpayers pay the same CGT rates as everyone else in the UK, even though their income tax bands differ.

This page is for general information only and is not financial, tax or legal advice. Your personal tax position depends on many factors - consult a qualified tax adviser or accountant for tailored guidance.

Sources & references

The rates, allowances and rules in this guide are drawn from the official HMRC and GOV.UK sources below, checked for the 2026/27 tax year. Each link opens the relevant government page in a new tab.

Verified against published HMRC and GOV.UK guidance.