Capital Gains Tax rates 2026/27: allowance, rates and how to cut your bill
Quick answer
Your plain-English guide to capital gains tax rates 2026/27: the tax-free allowance, the 18% and 24% rates, a worked example and ways to pay less.
Capital Gains Tax (CGT) is the tax you pay on the profit when you sell or dispose of an asset that has risen in value - for example shares, a second property, cryptocurrency or valuables. This guide explains the capital gains tax rates 2026/27, the tax-free allowance and the legal ways to reduce what you owe. The key point to remember up front: you are taxed on the gain, not on the whole sale price.
What is Capital Gains Tax?
CGT applies when you dispose of an asset for more than it cost you. "Disposing" usually means selling, but it can also mean giving an asset away or swapping it. The taxable gain is broadly the sale proceeds minus what you paid and minus certain allowable costs. Your main home is normally exempt under Private Residence Relief, so most people never pay Capital Gains Tax when they sell the house they live in.
Common assets that can trigger a CGT charge include shares held outside an ISA or pension, a second home or buy-to-let property, cryptoassets and valuable possessions. If you are working out a property sale, our capital gains tax on property calculator can help you estimate the figures.
The 2026/27 allowance and rates
Everyone gets an Annual Exempt Amount - a slice of gains you can make each tax year before any CGT is due. For 2026/27 this tax-free allowance is £3,000 per person. Gains above the allowance are taxed at one of two rates depending on your income.
There are two rates for 2026/27: 18% on any part of the gain that falls within your remaining basic-rate band, and 24% on the part above it. Importantly, these rates apply to both shares and other assets and residential property - the rates were aligned from 30 October 2024, so there is no longer a separate, higher property rate.
| Item | 2026/27 |
|---|---|
| Annual Exempt Amount (per person) | £3,000 |
| Rate within remaining basic-rate band | 18% |
| Rate on gains above the basic-rate band | 24% |
| Business Asset Disposal Relief rate | 14% |
The £3,000 allowance is per person, so a couple who jointly own an asset can use £6,000 of allowance between them.
How the rate is decided: the "stacking" rule
Your gain is "stacked" on top of your taxable income to work out how much is taxed at 18% and how much at 24%. In other words, you first count your income, then add the gain on top. The part of the gain that still sits inside your unused basic-rate band is taxed at 18%; anything above that threshold is taxed at 24%. If you are unsure where your income leaves you, the income tax calculator shows how much of your basic-rate band is already used up.
This means two people with the same gain can pay different amounts. Someone with plenty of unused basic-rate band may pay 18% on most or all of the gain, while a higher earner with no spare band pays 24% on the lot. Our guide to the UK income tax rates and bands explains exactly where the basic-rate threshold sits.
Tip: timing matters. If your income is lower in a particular year - for example after retiring or taking a career break - more of your gain may fall within the basic-rate band and be taxed at 18% rather than 24%.
A worked example
Imagine a basic-rate taxpayer who has spare room in their basic-rate band and makes a £20,000 gain on shares during 2026/27.
- Start with the gain: £20,000.
- Deduct the Annual Exempt Amount: £20,000 − £3,000 = £17,000 taxable.
- Apply the 18% rate (the gain fits within the basic-rate band): £17,000 × 18% = £3,060.
So the CGT bill is £3,060. If part of the gain had pushed above the basic-rate threshold, that part would have been taxed at 24% instead. You can run your own numbers with our capital gains tax calculator.
Business Asset Disposal Relief
If you are selling all or part of a qualifying business, Business Asset Disposal Relief can reduce the CGT rate to 14% on qualifying gains. A lifetime limit applies to how much gain can benefit from the relief, and there are conditions about the type of business and your involvement in it. Because the rules are detailed, it is worth checking whether you qualify before you sell. If you run a limited company, our guide on salary versus dividends for directors covers how owners commonly extract value before a sale.
Ways to cut your CGT bill
There are several straightforward and entirely legal ways to reduce CGT:
- Use your £3,000 allowance every year. The Annual Exempt Amount cannot be carried forward, so spreading disposals across tax years can use more than one year's allowance.
- Transfer assets between spouses or civil partners. Transfers between spouses and civil partners are not subject to CGT, so couples can use both allowances and both sets of basic-rate band.
- Use ISAs and pensions. Gains on investments held inside an ISA or pension are tax-free, so moving holdings into these wrappers shelters future growth. Topping up a pension can also lower your taxable income - see our guide to pension tax relief.
- Offset allowable losses. Losses on other assets can be set against your gains to reduce the taxable amount.
Reporting and paying CGT
How and when you report depends on the asset. Gains on residential property must be reported and the CGT paid within 60 days of completion. Other gains - such as those on shares - are usually reported through your Self Assessment tax return. Keep records of purchase prices, sale proceeds and allowable costs, as you will need them to calculate the gain accurately.
Good record-keeping also helps you claim losses correctly and prove the figures if HMRC ever asks. If you dispose of several assets in the same year, work through each gain and loss separately, then bring them together before applying your £3,000 allowance. Planning disposals in advance - rather than rushing them at the end of the tax year - gives you the best chance of using your allowance, your basic-rate band and any losses efficiently.
Selling a property: the 60-day reporting rule
If you sell a UK residential property and there is a taxable gain - for example a buy-to-let, a second home or a holiday home, but not your main home - you must report it and pay the Capital Gains Tax to HMRC within 60 days of completion. This is a separate, faster process from your normal Self Assessment cycle, and it is one of the most common things people miss when they sell property.
To report a property sale to HMRC, you set up a "Capital Gains Tax on UK property" account on the gov.uk website, work out the gain, and submit a return through that account. HMRC then issues a reference and a payment due date, and the tax must be paid within the same 60-day window. If you already complete Self Assessment, you still report the property gain again on your annual return, with the 60-day payment treated as a payment on account against the final figure.
The 60-day clock runs from the completion date, not the date contracts are exchanged or the date you accept an offer, so it is sensible to gather your figures - purchase price, sale proceeds, buying and selling costs, and the cost of any improvements - before completion rather than after. Missing the deadline can trigger penalties and interest even if the tax is eventually paid in full.
Note that you only need to make a 60-day report where there is actually CGT to pay; if the gain is fully covered by your Annual Exempt Amount, reliefs or losses so that no tax is due, a standalone property return is generally not required. Before completion, you can check both the likely tax and the deadline with our CGT 60-day reporting calculator, and estimate the gain itself with our capital gains tax on property calculator. You can read HMRC's own guidance on the process at report and pay your Capital Gains Tax.
Common CGT mistakes to avoid
Capital Gains Tax trips people up in predictable ways, and most of the errors cost money rather than save it. Being aware of them before you sell gives you the chance to plan around them.
- Forgetting to count the gain on top of income. Many people assume the whole gain is taxed at 18% because they are a basic-rate taxpayer. In reality the gain stacks on top of your income, so part of it can fall into the 24% band even if your salary alone keeps you in the basic-rate band.
- Missing the residential property reporting deadline. Property gains must be reported and paid within 60 days of completion, separately from your normal Self Assessment cycle. Late reporting can attract penalties even when the tax itself is eventually paid.
- Overlooking allowable costs. Beyond the purchase price, you can usually deduct costs such as stamp duty paid on acquisition, legal and estate agent fees, and the cost of capital improvements. Leaving these out inflates the gain and the tax.
- Wasting the annual allowance. Because the Annual Exempt Amount cannot be carried forward, disposing of everything in a single tax year can mean you only benefit from one year's £3,000 allowance instead of two.
- Ignoring losses. Losses from earlier years can often be carried forward and set against current gains, but only if they were reported to HMRC in the year they arose.
If a property sale is involved, our CGT 60-day reporting calculator can help you check the figures and the deadline before completion.
How CGT interacts with other taxes
Capital Gains Tax does not sit in isolation. The amount you pay, and the rate you pay it at, depends heavily on what else is happening in your tax position for the year.
Income Tax. Your income determines how much of your basic-rate band is left, which in turn decides how much of a gain is taxed at 18% rather than 24%. Anything that reduces your taxable income for the year - such as a personal pension contribution - can leave more room in the basic-rate band and lower the average rate on your gain.
ISAs and pensions. Assets held inside an ISA are free of CGT entirely, which is why long-term investors often prioritise filling their ISA allowance. Pensions work similarly for sheltering growth. Moving holdings into these wrappers over time gradually reduces the pool of assets that could ever face a CGT charge.
Inheritance Tax. CGT is charged on disposals during your lifetime, while a different set of rules applies on death. The interaction can be complex where assets are gifted, so significant gifts of valuable assets are worth planning carefully rather than rushing.
Cryptoassets. Disposals of crypto - including swapping one token for another, not just cashing out to pounds - are treated as disposals for CGT. Our crypto tax calculator helps you work through the gains across multiple transactions, which can quickly become numerous for active traders.
A step-by-step approach to working out your gain
Whatever the asset, the basic method for calculating a chargeable gain follows the same sequence. Working through it in order helps avoid mistakes and makes your figures easy to defend if HMRC asks.
- Establish the proceeds. This is normally what you sold the asset for. If you gave it away or sold to a connected person below value, the market value is used instead.
- Deduct the cost. Take off what you originally paid for the asset, plus the allowable buying and selling costs and the cost of any capital improvements.
- Apply reliefs. Reduce the gain by any relief you qualify for, such as Private Residence Relief on a home or Business Asset Disposal Relief on a qualifying business sale.
- Offset losses. Set current-year and brought-forward losses against the gains.
- Deduct the allowance. Take off your Annual Exempt Amount of £3,000.
- Apply the rate. Stack the remaining gain on top of your income and apply 18% within the basic-rate band and 24% above it.
Running the numbers through our capital gains tax calculator mirrors these steps and gives you a quick estimate before you commit to a sale.
Frequently asked questions
What is the CGT allowance for 2026/27?
The Annual Exempt Amount is £3,000 per person for the 2026/27 tax year. Gains below this are free of CGT, and the allowance cannot be carried into a future year.
What are the CGT rates for 2026/27?
The rates are 18% on the part of a gain that falls within your remaining basic-rate band and 24% on the part above it. These rates apply to shares, other assets and residential property alike.
Do I pay CGT when I sell my home?
Usually not. Your main home is normally exempt under Private Residence Relief, so most people pay no CGT when they sell the property they live in.
How is it decided whether I pay 18% or 24%?
Your gain is stacked on top of your taxable income. The part of the gain still within your basic-rate band is taxed at 18%, and anything above that threshold is taxed at 24%.
When do I have to report and pay CGT?
For residential property, you must report and pay within 60 days of completion. Other gains are normally reported on your Self Assessment return.
Can a couple combine their allowances?
Yes. Each person has their own £3,000 allowance, and transfers between spouses or civil partners are free of CGT, so couples can use both allowances and both basic-rate bands.
What is the 60-day Capital Gains Tax reporting rule for UK property sales?
The 60-day rule means that when you sell a UK residential property at a taxable gain, you must tell HMRC and pay the Capital Gains Tax due within 60 days of completion. It applies to property that is not your main home - such as a second home, holiday home or buy-to-let - and is separate from your annual Self Assessment return. Our CGT 60-day reporting calculator helps you check the deadline.
How do I report and pay CGT after selling a house in the UK?
You report a UK residential property sale by setting up a "Capital Gains Tax on UK property" account on gov.uk, calculating the gain, and submitting a return through that account within 60 days of completion. HMRC then tells you how much to pay and by when, and the tax is due within the same 60-day window. If you also file Self Assessment, you include the gain again on your annual return. You can estimate the tax first with our capital gains tax on property calculator.
What is the CGT 60-day reporting deadline if I sell a property?
The deadline is 60 days from the completion date of the sale - not the exchange date. If a taxable gain arises on a UK residential property that is not your main home, both the report and the payment must reach HMRC within those 60 days, or penalties and interest can apply.
Related calculators: Capital Gains Tax Calculator, Dividend Tax Calculator, Income Tax Calculator and the Inheritance Tax Calculator.
This guide is general information for the 2026/27 tax year, not personal tax advice. Check your own circumstances at gov.uk.
Who this affects most
| You are... | Your CGT reality in 2026/27 |
|---|---|
| Selling shares or funds outside an ISA | Only £3,000 of gains is tax-free; 18% or 24% above |
| A landlord selling a rental property | Same 18%/24% rates now, plus the 60-day reporting deadline |
| Married or in a civil partnership | Transfers between you are tax-free: two allowances, two basic bands |
| Selling your own home you always lived in | Usually no CGT at all (private residence relief) |
| Holding everything inside ISAs and pensions | No CGT ever; nothing to report |
| A business owner selling up | Business Asset Disposal Relief may cut the rate: see above |
Real example: Priya sells a buy-to-let with a £40,000 gain
| Item | Priya (salary £30,000) | If she earned £60,000 |
|---|---|---|
| Gain after costs | £40,000 | £40,000 |
| Annual exempt amount | -£3,000 | -£3,000 |
| Taxed at 18% (basic-band headroom £20,270) | £3,648.60 | £0 headroom |
| Taxed at 24% | £16,730 × 24% = £4,015.20 | £37,000 × 24% = £8,880.00 |
| CGT bill | £7,663.80 | £8,880.00 |
Both versions must report and pay within 60 days of completion using the 60-day reporting calculator to get the figure right first time.
If this is you, do this
| Situation | Meaning | Decision | Action |
|---|---|---|---|
| Gains near £3,000 this year | Allowance is use-it-or-lose-it | Harvest gains annually | Sell up to the allowance each April-to-April; rebuy inside an ISA |
| Married, asset in one name | Second allowance and band available | Transfer before selling | Interspousal transfers are tax-free; do it BEFORE exchange |
| Completing a property sale | 60-day clock starts at completion | Diary it now | Late filing brings penalties on top of the tax |
| Big gain, income near £50,270 | Rate flips 18% to 24% at the line | Time the sale | A pension contribution or a lean-income year can hold more gain at 18% |
| Losses on other assets | Losses offset gains pound for pound | Register them | Report losses on your return: unused ones carry forward indefinitely |
| Inherited assets | Base cost resets to date-of-death value | Recompute before panicking | Gains are measured from probate value, not the original price: see the second-death IHT guide |
All figures checked against HMRC published rates on 27 July 2026.
Written by
Laura Michelle Davis — Chartered Tax Adviser (CTA)
ACCA · CTA (Chartered Tax Adviser) · ATT · BSc Economics, UC Berkeley
Laura Michelle Davis is a Chartered Tax Adviser (CTA) who also holds the ACCA and ATT qualifications and a BSc in Economics from UC Berkeley. She specialises in UK personal tax, covering income tax, National Insurance, self-employment and capital gains, and has built her career making complicated rules easy to follow. At TaxFly, Laura writes and edits the tax guides and explainers, checking that figures reflect current HMRC rates and that every explanation answers the question a real person is actually asking. Her goal is plain-English clarity you can trust and act on.
