Capital Gains Tax in 2026/27: Rates, Reliefs and Planning

Capital Gains Tax (CGT) has changed a lot in a short time. The main rates rose on 30 October 2024, the annual exempt amount is now just £3,000, and from 6 April 2026 the rate for Business Asset Disposal Relief has risen to 18%. This guide sets out what applies in the 2026/27 tax year and how to plan around it.

CGT Rates for 2026/27

The same rates now apply to residential property and to most other assets, such as shares and business interests:

Gains are added on top of your other taxable income, so the rate depends on how much of your basic rate band is left. A large gain can be taxed partly at 18% and partly at 24%. Your main home is normally still covered in full by Private Residence Relief.

The £3,000 Annual Exempt Amount

Each individual can make gains of £3,000 a year tax-free in 2026/27. It was £12,300 as recently as 2022/23, so many people who never used to pay CGT now do — particularly investors with share portfolios held outside an ISA and people selling second homes or buy-to-let property. The exemption cannot be carried forward, so an unused allowance is lost at 5 April.

Business Asset Disposal Relief Is Now 18%

Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, reduces CGT for qualifying owners selling all or part of a business. The rate has increased in stages:

• Up to 5 April 2025: 10%
• 2025/26: 14%
• From 6 April 2026: 18%

The lifetime limit is currently £1 million of gains, but the October 2026 Budget announced that it will halve to £500,000 for disposals on or after 6 April 2027 (subject to Finance Bill 2026-27). Investors' Relief is also now 18% with a £1 million lifetime limit. At 18%, BADR gives no saving on gains that would fall in your basic rate band anyway. For gains that would otherwise be taxed at 24% it is still worth 6 percentage points — up to £60,000 on a full £1 million of qualifying gains before April 2027, or £30,000 on £500,000 after that — so it remains worth checking that you meet the conditions. For shares, these generally include holding at least 5% of the company and being an officer or employee for two years before the sale.

Reporting and Paying CGT

If you sell UK residential property and owe CGT, you must report and pay within 60 days of completion using HMRC's property reporting service. Other gains are reported on your Self Assessment return and paid by 31 January after the end of the tax year. Keep records of what you paid for an asset and any improvement costs — they reduce the taxable gain.

Planning Points for 2026/27

1. Use the £3,000 exemption every year — spreading disposals across tax years can keep more gains tax-free.
2. Use your spouse or civil partner — transfers between spouses living together are generally free of CGT, so assets can be shared to use two exemptions and, where one partner has a lower income, more of the 18% band.
3. Shelter investments in ISAs and pensions — gains within a Stocks and Shares ISA or a pension are free of CGT.
4. Claim your losses — capital losses must be reported to HMRC within four years of the end of the tax year to be usable, but can then be set against future gains.
5. Landlords — selling a rental property means an 18% or 24% charge and a 60-day deadline. Our landlord accountants can calculate the liability before you sell.
6. Business owners planning an exit — check BADR eligibility early and think about timing, structure and how the sale proceeds will be paid.

The Budget on 28 October 2026 left the main CGT rates and the £3,000 annual exempt amount unchanged. As well as the BADR cut above, it announced a new Founders' Relief: a 10% rate on up to £10 million of lifetime gains for qualifying founders from 6 April 2027. That relief is still subject to a consultation closing on 30 November 2026, so the detail may change.