Comparison · Capital Gains Tax · 2026/27
Capital Gains Tax: Basic Rate vs Higher Rate 2026/27 (18% vs 24%)
Whether a capital gain is taxed at 18% or 24% depends on your total taxable income for the year, not the gain in isolation -- and a single large gain can straddle both rates. This guide compares both bands for 2026/27 with worked examples.
TL;DR -- 2026/27 CGT Key Figures
- • Annual exempt amount: £3,000 per person
- • Basic rate: 18% (residential property and other assets)
- • Higher rate: 24% (residential property and other assets)
- • BADR rate: 18% up to £1m lifetime limit (up from 14% in 2025/26)
Basic Rate vs Higher Rate: Head-to-Head
| Feature | Basic Rate (18%) | Higher Rate (24%) |
|---|---|---|
| Applies when | Total income + gain stays within basic-rate band (up to £50,270) | Portion of gain pushing total income above £50,270 |
| Residential property | 18% | 24% |
| Other assets (shares, etc.) | 18% | 24% |
| Annual exemption | £3,000 (used first) | £3,000 (used first) |
Worked Example: Gain Straddling Both Rates
A taxpayer has £30,000 of other taxable income (after personal allowance) and makes a £40,000 capital gain on shares outside an ISA. The £3,000 annual exemption is deducted first, leaving a £37,000 taxable gain.
| Slice of gain | Amount | Rate | Tax |
|---|---|---|---|
| Up to £50,270 total income (£30,000 to £50,270) | £20,270 | 18% | £3,648.60 |
| Remaining gain above £50,270 | £16,730 | 24% | £4,015.20 |
| Total CGT due | £7,663.80 | ||
The £37,000 taxable gain is split between the 18% and 24% bands because it pushes the taxpayer's combined income and gains past the £50,270 basic-rate threshold partway through. This is why large one-off gains, such as selling a second property, often attract a blended effective rate somewhere between 18% and 24% rather than a single flat rate.
Frequently Asked Questions
Frequently Asked Questions
What are the basic-rate and higher-rate CGT rates for 2026/27?
The basic rate is 18% and the higher rate is 24% for 2026/27, applying equally to residential property and other assets like shares -- the rates were aligned at the October 2024 Budget.
How do I know whether my gain is taxed at 18% or 24%?
Gains stack on top of your other taxable income. The part of the gain that keeps total income within the £50,270 basic-rate threshold is taxed at 18%; the part above that is taxed at 24%. A single gain can straddle both rates.
What is the CGT annual exempt amount for 2026/27?
The annual exempt amount is £3,000 per person for 2026/27. This has been cut significantly in recent years -- from £12,300 (2022/23) to £6,000 (2023/24) to £3,000 (2024/25 onwards, where it remains frozen).
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Do all asset types use the same 18%/24% rates?
Most do. The main exception is Business Asset Disposal Relief (BADR), a reduced 18% rate (up from 14% in 2025/26) up to a £1 million lifetime limit for qualifying business disposals.
Can couples use both annual exemptions?
Yes -- each spouse/civil partner has their own £3,000 exemption, and assets can usually be transferred between them tax-free before sale, potentially sheltering up to £6,000 combined per year.
Does using an ISA avoid CGT entirely?
Yes -- gains on investments held within an ISA wrapper are completely exempt from CGT, regardless of size. Investors can shelter up to £20,000 of new money per year (2026/27 ISA allowance) this way.
How does CGT interact with income tax in the same year?
HMRC works out taxable income first, then stacks capital gains on top to determine the CGT rate split between 18% and 24%. Increasing pension contributions or Gift Aid in the same year can keep more of a gain in the 18% band.
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Disclaimer: This comparison is for general information based on 2026/27 Capital Gains Tax rates published by HMRC. Individual circumstances, especially involving reliefs like BADR, Investors' Relief or multiple gains in a tax year, can be complex -- consult an accountant or tax adviser before relying on these figures for a real transaction.