Capital Gains Tax in the UK: Rates and Allowances 2026/27

Capital gains tax (CGT) is a tax on the profit you make when you sell or dispose of an asset that has increased in value, such as shares, a second home, a buy-to-let or a business. For 2026/27 you pay 18% if the gain falls within your basic rate band and 24% above it, after a £3,000 annual exempt amount.

This guide explains what CGT is, what it applies to, how to calculate a gain, the reliefs that can reduce it and how to report it. Test your own numbers with our capital gains tax calculator, and for property specifically read our landlord tax guide.

CGT at a glance for 2026/27

What counts as a chargeable asset?

• Shares and funds held outside an ISA or pension.
• Property that is not your main home, such as a buy-to-let or second home.
• Business assets, including goodwill, and cryptoassets.
• Valuable personal possessions worth more than £6,000 each, excluding wasting chattels such as cars.

Your main home is generally exempt through private residence relief, and ISAs and pensions are free from CGT.

How to calculate a capital gain

1. Start with the disposal proceeds. That is the sale price, or the market value if you gift the asset.
2. Deduct the original cost of the asset.
3. Deduct allowable costs such as stamp duty, legal fees, estate agent fees and the cost of improvements.
4. Subtract the annual exempt amount of £3,000 and any losses.
5. Apply the correct rate of 18% or 24% depending on your other income.

Worked examples

Example 1: selling a buy-to-let

A landlord bought a flat for £250,000 and sells it for £340,000. Allowable costs for buying and selling come to £15,000. The gain is £75,000. After the £3,000 annual exempt amount the taxable gain is £72,000. The landlord’s other income uses up the basic rate band, so the whole gain is taxed at 24%, giving CGT of £17,280.

Example 2: selling shares

An employee with £30,000 of salary sells shares for a £10,000 gain. After the £3,000 exempt amount the taxable gain is £7,000. Their taxable income is £17,430 after the personal allowance, so £20,270 of the basic rate band is unused. The whole gain is taxed at 18%, giving CGT of £1,260.

Reliefs and ways to reduce CGT

• Private residence relief: your main home is normally exempt, including the final nine months of ownership.
• Annual exempt amount: use your £3,000 each year, and your spouse’s.
• Spouse transfers: transfers between spouses and civil partners do not trigger a gain, so you can use both allowances and basic rate bands.
• Losses: capital losses can be set against gains in the same year or carried forward if reported to HMRC.
• Business Asset Disposal Relief: a 18% rate on up to £1 million of qualifying business gains.
• Pensions and ISAs: keeping investments inside them avoids CGT.

Reporting and paying CGT

If you sell UK residential property and there is tax to pay, you must report the sale to HMRC and pay within 60 days of completion. For other gains, you report on your Self Assessment return and pay by 31 January after the end of the tax year. If your total gains are above the annual exempt amount, or your total sale proceeds exceed £50,000, you must report even if no tax is due. Keep records of purchase price, costs and improvements for as long as you own the asset.

CGT for company directors and business owners

When you sell shares in your own company or sell a business, you may qualify for Business Asset Disposal Relief at 18% on the first £1 million of lifetime gains if you meet the conditions, such as holding at least 5% of shares and being an officer or employee for two years. Planning before a sale is critical, so ask an accountant early.

CGT for London property owners

London property gains can be large because values have risen over time, so CGT planning matters for landlords and second-home owners. A flat bought in Hackney or Lewisham years ago may now show a six-figure gain. Keeping records and planning the sale date and ownership can save thousands. We help property owners across all boroughs. See our landlord accountants by borough and capital gains tax services.

Common CGT mistakes

• Missing the 60-day deadline on a property sale.
• Not keeping records of costs and improvements.
• Forgetting to report gains when proceeds exceed £50,000.
• Not using both spouses’ allowances.
• Not claiming losses within the time limit.

Shares: the matching rules

When you sell shares in a company that you have bought at different times, HMRC matches the disposal against your acquisitions in a set order: first shares bought on the same day, then shares bought in the following 30 days, then the average cost of your pooled holding. The 30-day rule prevents people from selling and buying back shares to crystallise a loss or use an allowance without a real change in their holding. Keep a record of every purchase and sale, including dividends reinvested.

Gifts and inherited assets

Giving an asset to someone other than your spouse counts as a disposal at market value, so you can have a CGT bill even though you receive no money. Gifts to charity are exempt. When someone dies, there is no CGT on the assets they leave. Instead, the beneficiary takes them at their value at the date of death, which resets the base cost. If you later sell, the gain is measured from that value, not from the original purchase price.

Cryptoassets

Selling cryptoassets, swapping one for another and using them to pay for goods can all be disposals. Each needs a record of date, value and cost in pounds. The same exempt amount and rates apply, and HMRC receives information from exchanges, so report your gains.

Capital gains tax in one minute

You pay CGT on the profit when you dispose of an asset above the £3,000 annual exempt amount, at 18% or 24% depending on your income. Property sales are reported within 60 days, other gains on your tax return. Keep purchase and improvement records, use spouse transfers and plan the timing of sales to keep the bill down.

Frequently asked questions

What are the CGT rates for 2026/27?

18% within the basic rate band and 24% above it, for both property and other assets, after the £3,000 annual exempt amount.

Do I pay CGT when I sell my home?

Generally not on your main home, thanks to private residence relief.

When do I pay CGT on a property sale?

Within 60 days of completion for UK residential property.

Can I reduce CGT by gifting an asset to my spouse?

Transfers between spouses are tax-neutral, so you can transfer before selling to use two exempt amounts and potentially two basic rate bands.

Do I pay CGT on cryptoassets?

Yes. Disposals of cryptoassets are chargeable, and you must report gains above the exempt amount.