Capital Gains Tax (CGT) is the tax you pay on the profit when you sell an asset that has gone up in value. For 2026/27, most gains are taxed at 18% within your basic-rate band and 24% above it, after a tax-free annual exempt amount of £3,000. You are taxed on the gain, not the full amount you receive.
This is our pillar guide to CGT in the UK. It gives you the rates, the allowance, the reporting rules and the legitimate ways to pay less, then points you to in-depth guides for property, shares, business sales and spouse transfers. CGT rates are the same across the UK, though if you are in Scotland your Income Tax bands differ, which affects how much of a gain falls in the basic-rate band.
What is Capital Gains Tax?
Capital Gains Tax is a tax on the profit you make when you sell or \"dispose of\" an asset that has risen in value. You only pay tax on the gain above what you paid, not on the whole sale price. \"Disposing\" also covers giving an asset away, swapping it, or getting compensation for it.
Common assets that can trigger CGT include a second home or rental property, shares held outside an ISA or pension, business assets, cryptoassets, and personal possessions worth more than £6,000 (apart from your car). Some disposals are usually free of CGT: selling your main home normally qualifies for Private Residence Relief, gifts between spouses or civil partners are made on a no-gain, no-loss basis, and assets inside an ISA or pension are sheltered. (gov.uk: Capital Gains Tax.)
What are the Capital Gains Tax rates for 2026/27?
For 2026/27, the main CGT rates for individuals are 18% on the part of a gain that falls within your basic-rate band and 24% on the part above it. These rates now apply to residential property and other assets alike, after the rates were unified following the October 2024 changes.
| What you sold | Gain within basic-rate band | Gain above basic-rate band |
|---|---|---|
| Most assets (shares, crypto, business assets) | 18% | 24% |
| Residential property (not your main home) | 18% | 24% |
| Gains qualifying for Business Asset Disposal Relief | 18% | 18% |
The standard 18% and 24% rates have applied to most assets since 30 October 2024. Since 6 April 2025, residential property has been taxed at the same rates as other assets, so there is no longer a separate, higher property rate. (Sources: gov.uk CGT rates and allowances, gov.uk CGT rates.) For a fuller breakdown with worked examples, see our guide on how much Capital Gains Tax you pay.
What is the Capital Gains Tax allowance for 2026/27?
Every individual has an annual exempt amount, often called the CGT allowance. For 2026/27 it is £3,000, unchanged from 2025/26. This is the total amount of gains you can make in the tax year before any CGT is due, and it cannot be carried forward, so if you do not use it you lose it.
Couples each get their own £3,000, which is one reason jointly owned assets are worth planning around. (gov.uk CGT rates and allowances.) The 18% rate applies only to the part of your gain that sits within your unused basic-rate band. For 2026/27 that band covers taxable income up to £37,700 above your £12,570 Personal Allowance, both frozen. (gov.uk Income Tax rates.) The more of that band your income already uses, the less of your gain is taxed at 18% rather than 24%.
What is Business Asset Disposal Relief in 2026/27?
Business Asset Disposal Relief (BADR) reduces the CGT on qualifying gains when you sell all or part of a trading business. For disposals on or after 6 April 2026, BADR is charged at 18%, up from 14% in 2025/26 and 10% before October 2024. The relief applies to a £1,000,000 lifetime limit of qualifying gains.
| Disposal date | BADR rate |
|---|---|
| Before 30 October 2024 | 10% |
| 30 October 2024 to 5 April 2026 | 14% |
| On or after 6 April 2026 | 18% |
BADR is most valuable to owner-managers selling a trading company or unincorporated business. With the rate stepping up, the completion date of a deal that straddles the April year end is now a planning decision in its own right. (gov.uk Business Asset Disposal Relief.) For the qualifying conditions and how the £1 million limit works, read our explainer on Business Asset Disposal Relief.
How do you calculate a capital gain?
The calculation is the same whatever you sell: take your sale proceeds, subtract the original cost and allowable costs, then deduct the £3,000 annual exempt amount to reach your taxable gain. You then apply the 18% and 24% rates depending on where the gain stacks on top of your income.
- Work out the gain. Sale proceeds, less what you paid, less allowable costs (buying and selling fees and capital improvements such as an extension, but not normal repairs).
- Add up gains for the year and deduct allowable losses, including losses carried forward.
- Take off the annual exempt amount of £3,000.
- Stack the taxable gain on top of your taxable income to see how much falls in the basic-rate band (18%) and how much sits above it (24%).
- Apply the rates to each slice and add them together.
Illustrative example. A higher-rate taxpayer sells a rental flat bought for £240,000 for £320,000, with £8,000 of selling costs. The gain is £72,000. After the £3,000 allowance the taxable gain is £69,000, all above the basic-rate band, so the bill is £69,000 × 24% = £16,560. You can sanity-check your own figures with our Capital Gains Tax calculator before you commit to a sale.
How does CGT differ for shares and property?
The 18% and 24% rates apply to both shares and residential property, but the reporting rules differ sharply. Property gains must be reported and paid within 60 days of completion, while gains on shares go through your annual Self Assessment return. Shares also have special pooling rules for working out cost.
| Point | Residential property (not main home) | Shares (outside ISA/pension) |
|---|---|---|
| Rates 2026/27 | 18% / 24% | 18% / 24% |
| Reporting | 60-day CGT on UK property account | Self Assessment by 31 January |
| Cost rules | Purchase price plus improvements | Section 104 share pool, same-day and 30-day rules |
| Main relief | Private Residence Relief on a main home | ISA and pension shelter future gains |
For the detail on each, see our guides to Capital Gains Tax on shares and the Capital Gains Tax on property landlord guide.
What is Private Residence Relief?
Private Residence Relief (PRR) means you usually pay no CGT when you sell your only or main home. It covers the period you lived in the property as your main residence, plus the final nine months of ownership, even if you had moved out by then. (gov.uk: Tax when you sell your home.)
PRR can be restricted if you let the property out, used part of it exclusively for business, or the grounds are very large (broadly more than half a hectare). If you have owned more than one home, you may be able to elect which counts as your main residence for the relief. This is where advice pays off, because the relief can be worth tens of thousands of pounds.
When do you report and pay CGT?
It depends on what you sold, and the property deadline catches a lot of people out. If you sell a UK residential property that is not your main home and there is CGT to pay, you must report and pay it within 60 days of completion using a Capital Gains Tax on UK property account.
For other assets, such as shares, you report through your annual Self Assessment tax return. The deadline to file online and pay is 31 January following the end of the tax year, so a gain made in 2026/27 is reported by 31 January 2028. (Sources: gov.uk: report and pay CGT on UK property, gov.uk Self Assessment deadlines.) If you already file a return, you still report a property gain there too, but the 60-day payment comes first. Our self assessment service handles the sequencing for you.
How can you legally reduce your CGT bill?
You cannot make a real gain disappear, but several legitimate moves shrink the tax on it: use your £3,000 allowance every year, transfer assets to a spouse before sale, shelter investments in ISAs, and time disposals across two tax years. Claiming losses and allowable costs also reduces the gain.
- Use both partners' allowances and bands. Transferring a share of an asset to a spouse or civil partner before sale can use two £3,000 allowances and two basic-rate bands. See our guide to gifts between spouses and how CGT and IHT work.
- Time your disposals. Spreading sales across two tax years can use two £3,000 allowances rather than one.
- Use ISAs. Gains on investments held inside an ISA are free of CGT, so moving holdings into an ISA over time shelters future growth.
- Claim your losses. Capital losses, including ones carried forward, reduce your gains. Report losses even in a year you owe no tax, so they are on record.
- Do not forget allowable costs. Capital improvements and buying and selling fees all reduce the gain.
For property specifically, our guide on how to reduce Capital Gains Tax on property covers the levers in detail, and our pages for landlords and limited companies explain how we help in each case.
Thinking about a sale and want the real number before you commit? Book a free 20-minute call with a Zmartly accountant through our tax advisory service, and we will work through your gain, your reliefs and your reporting deadlines with you.
Frequently asked questions
What is the Capital Gains Tax rate in the UK for 2026/27?
For 2026/27, most capital gains are taxed at 18% within your basic-rate band and 24% above it, after the £3,000 annual exempt amount. The same rates apply to residential property and other assets, as the rates were unified following the October 2024 changes.
What is the Capital Gains Tax allowance for 2026/27?
The annual exempt amount is £3,000 per individual for 2026/27, unchanged from 2025/26. You can make total gains up to this figure in the tax year before any CGT is due, and it cannot be carried forward to the next year (gov.uk).
Do I pay Capital Gains Tax when I sell my main home?
Usually no. Selling your only or main residence normally qualifies for Private Residence Relief, so there is typically no CGT. It can apply differently if you let the property out, used part exclusively for business, or the grounds are very large.
How quickly do I have to pay CGT on a property sale?
If CGT is due on a UK residential property that is not your main home, you must report and pay it within 60 days of completion using a Capital Gains Tax on UK property account. Late reporting or payment can lead to interest and penalties (gov.uk).
How much is CGT on a business sale in 2026/27?
Where Business Asset Disposal Relief applies, qualifying gains are taxed at 18% for disposals on or after 6 April 2026, up from 14% in 2025/26 and 10% before October 2024. The relief covers up to a £1,000,000 lifetime limit of qualifying gains (gov.uk).
How can I legally reduce my Capital Gains Tax?
Use your £3,000 annual allowance each year, transfer assets to a spouse before sale to use two allowances and bands, shelter investments in ISAs, time disposals across two tax years, and claim any allowable losses and costs to reduce the gain.
