If your taxable income already uses the basic-rate band, most or all of your capital gains will be charged at 24% — the higher CGT rate for 2026/27. This guide explains exactly how income interacts with CGT, what to do when only part of a gain falls in the higher-rate band, and practical steps to reduce the bill.
Published by the UK Money Calculators editorial team. Last updated for the 2026/27 tax year.
Official source: GOV.UK — Capital Gains Tax rates
Capital gains are stacked on top of your taxable income when calculating CGT. The sequence HMRC uses is:
If your taxable income is £50,270 or above, there is no remaining basic-rate band. Your entire taxable gain is charged at 24%.
A higher-rate taxpayer has taxable income above the basic-rate band limit of £50,270. Because income fills the band first, capital gains have no room at the 18% rate. The calculation is straightforward: every pound of taxable gain (above the £3,000 annual exempt amount) is charged at 24%.
This means someone earning £60,000 who realises a £20,000 gain has zero basic-rate band remaining. After the £3,000 annual exempt amount, the full £17,000 taxable gain is at 24%.
Alex has a salary of £60,000 in 2026/27. He sells shares making a gain of £20,000. He has no capital losses and has not used any of his annual exempt amount.
Alex has a small amount of basic-rate band remaining (£2,840), so the first slice of gain is at 18%. The rest is at 24%.
If Alex's salary were £72,600 (taxable income £60,030 — all above the £50,270 limit), the entire £17,000 taxable gain would be at 24%, giving a CGT bill of £4,080.
It is common for taxpayers to have some basic-rate band left even though their income is relatively high. The calculation splits the gain at the boundary:
This split happens automatically in the CGT calculation. The worked example above illustrates it: £2,840 at 18%, then £14,160 at 24%.
Every individual has a £3,000 annual exempt amount for 2026/27. This is deducted from the total gain before the rate calculation is applied. It does not increase the amount of basic-rate band available — it simply reduces the size of the taxable gain.
If you make multiple disposals in the same tax year, all gains (and losses) are pooled and the £3,000 annual exempt amount is applied once to the net total. You cannot carry forward any unused annual exempt amount to the next tax year.
Several strategies can reduce CGT for higher earners:
Each strategy has its own conditions and limits. Pension contributions are capped by the annual allowance (usually £60,000 or 100% of earnings). Tax advice from a qualified professional is recommended before making significant planning decisions.
Calculate your CGT as a higher-rate taxpayer
Enter your taxable income and gain to see exactly how much CGT is due — including the split between 18% and 24% rates.
Open the CGT calculatorIf your taxable income (gross income minus the £12,570 personal allowance) is £50,270 or above, all of your taxable capital gain is charged at 24%. There is no remaining basic-rate band for gains to fall into. The £3,000 annual exempt amount is still deducted before calculating the tax.
Yes, in principle. Pension contributions reduce your taxable income. If a contribution brings your taxable income below £50,270, some of the capital gain can fall into the basic-rate band at 18%. For example, if your income is £53,000 and you contribute £5,000 to a pension (grossed up with tax relief to £6,250), your taxable income falls to approximately £40,750 — freeing up £9,520 of basic-rate band for gains. Note that pension contributions are subject to the annual allowance (usually £60,000) and other rules.
No. Capital gains are not income and do not affect your income tax rate. However, for taxpayers whose income is between £100,000 and £125,140, capital gains count towards "adjusted net income" for the purpose of the personal allowance taper. This can create an effective marginal rate of 60% on income in that band. If your income is near £100,000, take professional advice before realising significant gains.
In 2026/27 the higher CGT rate for residential property is 24% — the same as for other assets. From October 2024 onwards, HMRC aligned the rates. Basic-rate taxpayers pay 18% on both residential property gains and gains on other assets. The distinction between property and non-property gains no longer affects the rate, only whether Private Residence Relief applies.
Every individual has a £3,000 annual exempt amount regardless of their income level. It is deducted from your total net gains before the CGT rate is applied. If your total gains for the year are £3,000 or less, no CGT is due. If they are more, only the excess is taxable — and, for higher-rate taxpayers, that excess is taxed at 24%.
This page is for general information only and is not financial, tax or legal advice. CGT rules interact with income tax in ways that depend on your individual circumstances. Consult a qualified tax adviser before making disposal or planning decisions.