Spreading Capital Gains Across Tax Years and a Spouse to Use Two GBP 3,000 Allowances (2026/27)

A shrinking allowance makes timing matter

The Capital Gains Tax Annual Exempt Amount has fallen sharply in recent years and now stands at just GBP 3,000 per person for 2026/27. Gains above that are taxed at 18% within your remaining basic-rate band and 24% above it, for both residential property and other assets.

With such a small exemption, the timing of disposals and the use of a spouse's allowance have become far more important. Two simple, fully legal levers can multiply the amount of gain you shelter: spreading sales across tax years and transferring assets to a spouse or civil partner.

Lever one: spread across tax years

The CGT year ends on 5 April. Each new tax year brings a fresh GBP 3,000 allowance. If a planned disposal would create a gain above GBP 3,000, selling part before 6 April and the rest afterwards uses two years of allowances.

Lever two: transfer to a spouse

Transfers between spouses or civil partners who live together are made on a no gain, no loss basis. There is no CGT on the transfer itself, and your spouse inherits your original base cost. When they later sell, they can use their own GBP 3,000 exemption and their own tax bands.

Worked example

Olivia holds shares standing at a GBP 12,000 unrealised gain and wants to sell. She is a higher-rate taxpayer.

If she sells everything in one year as a sole owner:

• GBP 12,000 gain less GBP 3,000 exemption = GBP 9,000 taxable.
• At 24%, the tax is GBP 2,160.

Now she plans ahead with her spouse over two tax years:

• She transfers half the shares to her spouse with no tax on the transfer.
• In year one, each sells a quarter of the original holding, realising GBP 3,000 each. Two allowances cover GBP 6,000 of gain, so no tax.
• In year two, each sells the remaining quarter, realising another GBP 3,000 each. Two more allowances cover the final GBP 6,000.
• Total tax: nil, compared with GBP 2,160.

The whole GBP 12,000 gain is sheltered by using four GBP 3,000 allowances across two people and two years.

Practical checklist

• Confirm the spouse transfer is a genuine, outright gift with no strings attached.
• Mind the 30-day share matching rules if you intend to repurchase the same shares.
• Remember each tax year resets the allowance on 6 April, so plan around that date.
• Consider your spouse's tax band: gains taxed in their hands may fall in the 18% rather than 24% rate.
• Keep records of base costs, dates and transfers.

A measured approach

These tactics are well established and rely on allowances Parliament provides, but they only work if executed correctly and genuinely. This is general information, not financial advice, and your wider tax position matters.

To estimate the tax on a disposal and test how splitting it changes the result, use the capital gains tax calculator on CalcHub, and confirm the current rates, allowance and spouse transfer rules on gov.uk.