CGT Annual Exempt Amount 2026/27: Using the £3,000 Allowance on Shares

A much smaller allowance than it used to be

The Capital Gains Tax annual exempt amount has fallen sharply in recent years, from £12,300 before April 2023 down to £3,000 for 2026/27. This means a far wider range of ordinary share sale profits — even relatively modest ones — now attract Capital Gains Tax that would previously have fallen entirely within the tax-free allowance.

Worked example: £5,000 gain from selling shares

Chargeable gain after the £3,000 annual exempt amount: £5,000 − £3,000 = £2,000. A basic-rate taxpayer pays 18% on shares and other assets outside property: £2,000 × 18% = £360. A higher-rate taxpayer pays 24%: £2,000 × 24% = £480.

Using both spouses' allowances

Because the £3,000 exempt amount is personal, a married couple or civil partners jointly holding shares can transfer assets between themselves tax-free before a sale, allowing each partner's own £3,000 allowance to be set against a share of the combined gain — a straightforward way to reduce the taxable portion of a larger joint disposal.

The ISA alternative

Since gains on shares held within a Stocks and Shares ISA are entirely free of Capital Gains Tax, using the £20,000 annual ISA allowance to hold shares avoids the £3,000 exempt amount question altogether for those specific holdings — a strong reason to prioritise ISA contributions for new share purchases where possible, rather than accumulating gains in a general investment account.

Bottom line

With the CGT annual exempt amount now at just £3,000, far more ordinary share sale gains attract tax than in previous years, though spouses can each use their own allowance against a jointly held position. Sheltering new share purchases within an ISA remains the most straightforward way to avoid the issue for future gains entirely.

Sources

• GOV.UK: Capital Gains Tax: Allowances
• GOV.UK: Capital Gains Tax on Shares