Capital Gains Tax Rates 2026/27: What Changed and What to Plan For

Capital gains tax (CGT) has undergone significant reform since October 2024, and the 2026/27 tax year represents the first full year in which most taxpayers are operating under the new equalised rate structure. Whether you are selling shares, a second property, or a business, understanding the current rules is essential for tax planning.

What Changed at the October 2024 Autumn Budget

The Chancellor's October 2024 Budget announced immediate changes to CGT rates, effective from 30 October 2024. Before that date, the main rates on non-property assets were 10% (basic rate) and 20% (higher rate). These were raised to 18% and 24% respectively -- the same rates already applying to residential property gains. The effect was to collapse the two separate rate schedules into one unified structure.

For property, nothing changed at that point. Residential property had already been at 18%/28% before April 2024 reduced the upper rate to 24%. By October 2024, both asset classes sat at 18%/24%.

CGT Rates in 2026/27

The current rates, applying from 30 October 2024 onwards and continuing through 2026/27, are:

• Basic-rate taxpayers: 18% on all gains (residential property and other assets)
• Higher and additional-rate taxpayers: 24% on all gains

Whether you pay 18% or 24% depends on your total taxable income plus the gain itself. If stacking the gain on top of your income takes you into higher-rate territory, the portion above the GBP 50,270 threshold is taxed at 24% and the rest at 18%.

The Annual Exempt Amount

Each individual retains an annual exempt amount (AEA) of GBP 3,000 in 2026/27. Only gains above this threshold are taxable. Couples can use both allowances, potentially sheltering GBP 6,000 in combined gains. The AEA cannot be carried forward -- use it or lose it each year.

Trustees of most trusts have an AEA of GBP 1,500.

Business Asset Disposal Relief

Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, provides a reduced rate for qualifying business disposals. From April 2025, BADR carries a rate of 18% -- up from 10% previously. The lifetime gains limit remains GBP 1,000,000.

To qualify for BADR you must have owned the business asset for at least two years before disposal, and (for shares) held at least 5% of the ordinary share capital and voting rights in a trading company in which you were an employee or officer.

BADR is available on disposals of:

• The whole or part of a trading business you run as a sole trader or partner
• Shares in your personal trading company
• Assets used by your business or personal trading company

Even at 18%, BADR saves GBP 60,000 compared to the main 24% rate on a full GBP 1 million lifetime gain.

Investors' Relief

Investors' Relief offers the same 18% rate for external investors who hold newly issued shares in an unlisted trading company for at least three years. The lifetime limit is GBP 10 million.

Reporting CGT on Residential Property

A critical administrative requirement that remains in force is the 60-day reporting rule for UK residential property. If you dispose of a UK residential property and a CGT liability arises, you must:

1. Report the gain online using HMRC's "Report and pay CGT" service
2. Pay the estimated tax due
3. Do both within 60 days of the completion date

Failure to meet the 60-day deadline results in an automatic penalty plus interest on late payment. Non-UK residents must report even if no tax is due.

Note that non-reportable disposals exist -- for example where the property is your main home and principal private residence relief (PPR) covers the entire gain.

CGT on Other Assets: Self Assessment

For gains on shares, funds, cryptocurrency, collectibles, and other assets, the reporting route is the annual self assessment tax return. You must complete a tax return if:

• Your total gains exceed the AEA (GBP 3,000)
• Your total proceeds exceed four times the AEA (GBP 12,000), even if no tax is due
• You made a loss you want to register for future offset

The self assessment deadline is 31 January following the tax year end.

Planning Strategies for 2026/27

Use the AEA every year. With the allowance at a historic low of GBP 3,000, careful phasing of disposals across tax years becomes more important than ever.

Transfer assets between spouses before disposal. Interspousal transfers are at no gain/no loss. You can use both partners' AEAs and potentially their different rate bands to reduce the overall bill.

Consider timing around income. If your income varies year to year, selling in a lower-income year keeps more of the gain in the 18% band rather than 24%.

Offset losses. Crystallising losses in the same tax year as gains directly reduces your taxable gain. Losses not used in the current year can be carried forward indefinitely but must be reported.

EIS and SEIS deferral. Reinvesting gains into qualifying EIS shares can defer CGT indefinitely. SEIS investments carry a CGT exemption on the invested amount for gains reinvested.

With CGT rates now broadly higher than they were before October 2024, proactive planning pays off more than ever.