What Is the UK Capital Gains Tax Rate in 2026-27?
As at August 2026, UK CGT rates are 18% (basic) and 24% (higher/additional), with a £3,000 annual exemption. Main residences are exempt; second homes, shares and businesses are chargeable.
Short answer: As at 9 August 2026, UK capital gains are taxed at 18% for basic-rate taxpayers and 24% for higher and additional-rate taxpayers, with a tax-free annual exempt amount of £3,000. Your main residence is generally exempt; gains on second homes, shares, businesses and most investments are chargeable.
The CGT rates
The current rates took effect for disposals on or after 30 October 2024, when they doubled from 10%/20%. CGT is charged on the gain (sale price less cost and allowable expenses), and the rate depends on where the gain falls within your income bands — gains are treated as the top slice of income.
The annual exempt amount
The tax-free allowance is £3,000 per individual for 2026-27 — frozen after reductions from £6,000 (2023-24) and £12,300 (before that). Married couples each have their own allowance, so up to £6,000 of gains can be sheltered each year.
What about business sales? BADR
Selling qualifying business shares can access Business Asset Disposal Relief (BADR), which applies a 18% rate to the first £1 million of lifetime qualifying gains. This saves higher-rate taxpayers 6% (24% − 18%) — up to £60,000 — but nothing for basic-rate taxpayers.
What about property? Main residence is exempt
Your main home is exempt under Private Residence Relief. Gains on second homes and buy-to-let property are taxed at 18%/24%. Where a property was once your main home, the final 9 months of ownership are treated as occupied even if you were not living there. Letting Relief was largely abolished from April 2020.
Reporting and payment
For most assets, CGT is reported and paid via the Self Assessment tax return by 31 January after the tax year. For UK residential property (second homes and buy-to-lets), you must report and pay within 60 days of completion using the UK Property Return.
Practical example
A higher-rate taxpayer makes a £50,000 gain selling shares in 2026-27:
- £3,000 annual exemption (0%)
- £47,000 at 24% = £11,280
- Total CGT: £11,280
If £20,000 of the gain were qualifying business shares with BADR, that portion would be taxed at 18% instead of 24%, saving £1,200.
Legislation
CGT is charged under the Taxation of Capital Gains Act (TCGA) 1992. The 18%/24% rates took effect under the Finance (No. 2) Act 2024. The £3,000 annual exempt amount is set by FA 2024. The 60-day residential property reporting regime is under Schedule 2, FA 2019.
How Newshams can help
Newshams Tax Advisers advises on CGT planning — share and business disposals, property gains, BADR qualification and 60-day reporting. Contact us on +44 (0) 800 211 8657 or enquiries@newshams.com.
Frequently Asked Questions
What is Capital Gains Tax?+
Capital Gains Tax (CGT) is a tax on the profit made when you sell or dispose of an asset that has increased in value. The rate depends on your income tax band and the type of asset.
How can I reduce my Capital Gains Tax bill?+
Strategies include using your annual exempt amount, offsetting losses, claiming reliefs such as Business Asset Disposal Relief (formerly Entrepreneurs' Relief), and timing disposals carefully. Specialist advice can identify the most effective approach.
What is Business Asset Disposal Relief?+
Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, reduces the rate of CGT on qualifying business disposals to 10%, subject to a lifetime limit of £1 million.
Simon Newsham CTA
Chartered Tax Adviser — Founder, Newshams Tax Advisers
Simon Newsham is a Chartered Tax Adviser (CTA) with over 30 years' experience advising businesses, high net worth individuals, law firms and accountancy practices on complex UK tax matters. He has been advising clients since 1995 and is a member of the Chartered Institute of Taxation.
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