Capital Gains Tax on a £40,000 Gain 2026/27
After the £3,000 annual exempt amount, a basic-rate taxpayer (£35,000 other income) owes £7,964 CGT on a £40,000 gain. A higher-rate taxpayer (£55,000 other income) owes £8,880.
A £40,000 gain is about where the gain alone fills the basic-rate band. £37,000 is taxable, nearly the whole £37,700, so it stays entirely at 18% only if your income is £13,270 or less: in practice, almost no taxable income at all. Everyone else pays some 24%: £7,063.80 on £20,000 of income, £7,963.80 on £35,000 and £8,880 on £55,000.
Which rate does a £40,000 gain pay at different incomes?
| Other income | Band left | At 18% | At 24% | CGT |
|---|---|---|---|---|
| £20,000 | £30,270 | £30,270 | £6,730 | £7,063.80 |
| £35,000 | £15,270 | £15,270 | £21,730 | £7,963.80 |
| £45,000 | £5,270 | £5,270 | £31,730 | £8,563.80 |
| £55,000 | £0 | £0 | £37,000 | £8,880 |
This is the size where retirement income starts to matter. Someone whose only income is close to the £12,570 Personal Allowance keeps nearly all of it at 18%; someone drawing £20,000 a year from pensions already has £6,730 of the gain at 24%.1 If you can choose when to draw pension income, a year with less drawn leaves more band for the gain.
At the margin, the next £1,000 of gain costs £240 for the seller on £20,000 and £240 on £35,000: on this gain everyone with a salary pays the higher rate on any extra. Someone with no taxable income has just £700 of band left after it; beyond that, they pay 24% too.
Can you pay less on a £40,000 gain?
| Option | CGT | Saving |
|---|---|---|
| Sell it all in 2026/27 | £8,880 | - |
| Half before 6 April 2027, half after | £8,160 | £720 |
| Half given first to a spouse with no income | £7,140 | £1,740 |
| Half given first to a spouse earning £35,000 | £7,243.80 | £1,636.20 |
| £10,000 gross pension contribution | £8,563.80 | £316.20 |
| £20,000 gross pension contribution | £7,963.80 | £916.20 |
Spreading the sale over two tax years
Two tax years save £1,636.20 for a seller on £35,000, the most splitting can save at that income: each £20,000 half leaves £17,000 taxable, more than the £15,270 band, so the rest is at 24% either way. Bigger gains on this site show the same £1,636.20. A higher-rate seller saves £720.
Giving half to a spouse or civil partner
A spouse with no income saves £1,740; one on £35,000 saves £1,636.20. The difference is the spouse's band at work: a non-earning spouse takes their whole £20,000 share at 18% after the allowance, while an earning spouse runs out of band part-way.2
Pensions, ISAs and reliefs
For a higher-rate seller on £55,000, a £20,000 gross pension contribution saves £916.20. Bringing all £37,000 back to 18% would take £41,730, more than many people can pay in, because relief only covers contributions up to 100% of your earnings.63
Reporting and paying the tax
With £37,000 taxable, reporting is unavoidable. Proceeds on a gain this size are often near or above £50,000, and if so a Self Assessment filer completes the capital gains pages whatever the losses or reliefs.5 For property, the 60 days run from completion, not exchange.4
Your own figures: use the full calculator → for your sale price, costs, losses and income.
CGT on other gain amounts
Frequently asked questions
How much CGT does a retired person pay on £40,000?
It depends on pension income. With no income above the Personal Allowance, all £37,000 is at 18%: £6,660. With £20,000 of pension income it is £7,063.80.
Is it worth giving my spouse half of a £40,000 gain?
If they have little income, yes: the engine puts the saving at £1,740. The transfer must be a real gift, so the asset becomes theirs.
What is the effective CGT rate on £40,000?
19.9% for a seller on £35,000 and 22.2% on £55,000, measured against the whole gain rather than the £37,000 left after the allowance.
Figures from our calculator engine, 7 November 2026. Guidance only, not advice.
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.
- Capital Gains Tax: rates www.gov.uk/capital-gains-tax/rates
- Capital Gains Tax: gifts to your spouse or charity www.gov.uk/capital-gains-tax/gifts
- Finance Act 2004, section 192: relief at source (basic rate limit increased by the contribution) www.legislation.gov.uk/ukpga/2004/12/section/192
- Report and pay CGT: if you sold a UK property on or after 6 April 2020 www.gov.uk/report-and-pay-your-capital-gains-tax/if-you-sold-a-property-in-the-uk-on-or-after-6-april-2020
- Self Assessment: Capital Gains summary (SA108) and notes www.gov.uk/government/publications/self-assessment-capital-gains-summary-sa108
- Tax on your private pension contributions: tax relief www.gov.uk/tax-on-your-private-pension/pension-tax-relief