Glossary · UK
What is AEA (Annual Exempt Amount — CGT)?
Tax-free allowance for capital gains, £3,000 per person for 2026/27.
Full Definition
The Annual Exempt Amount (AEA) is the tax-free slice of capital gains each individual can realise in a tax year before Capital Gains Tax applies. For 2026/27 it is £3,000 (down from £6,000 in 2023/24 and £12,300 in 2022/23). Trusts get half — £1,500. Gains above the AEA are taxed at 18% (basic-rate band) or 24% (higher/additional-rate) for most assets including shares and residential property from 30 October 2024 onwards. Couples each have their own AEA, so transferring assets between spouses before sale can double the exemption. The AEA is use-it-or-lose-it — it cannot be carried forward.
How AEA (Annual Exempt Amount — CGT) is calculated
Taxable gain = max(0, Total gains - Allowable losses - 3000)
CGT = Taxable gain x rate- 3000
- Annual Exempt Amount for 2026/27 (GBP, per person).
- rate
- 18% for basic-rate taxpayers, 24% for higher/additional-rate; residential and other assets are both 18%/24%.
Worked example: A higher-rate taxpayer with a GBP 13,000 gain on shares: (13,000 - 3,000) x 24% = GBP 2,400 of Capital Gains Tax.