Capital Gains Tax in 2026/27: rates, the allowance and good timing
With an annual exempt amount of just £3,000 and rates of 18% and 24%, more people are paying Capital Gains Tax. How it works, and the planning that still makes a difference.
Capital Gains Tax applies to the gain when you sell or give away an asset that has risen in value: shares outside an ISA, a second property, a business, or valuable possessions worth £6,000 or more. Your main home is usually exempt.
How the rate is set
After the £3,000 annual exempt amount, gains are added to your taxable income. The part that falls within the basic rate band is taxed at 18%, the rest at 24%. In HMRC’s example, someone with £20,000 of taxable income and gains of £52,600 pays 18% on £17,700 and 24% on £31,900: £10,842 in all.
Show the data
| Annual exempt amount (no tax) | £3,000 |
|---|---|
| Taxed at 18% | £17,700 |
| Taxed at 24% | £31,900 |
Planning that still helps
- Use each year’s £3,000: it cannot be carried forward.
- Move assets between spouses before a sale, so both allowances and basic rate bands are used.
- Report losses: they can be set against future gains, but only if claimed within four years.
- Use ISAs and pensions for new investments, so future gains are tax-free.
Business Asset Disposal Relief, at 18%, applies to the first £1 million of lifetime gains on qualifying business sales until 5 April 2027, and the first £500,000 after that.
More on
This insight is general information, not advice for your circumstances. Talk to us before acting on it.