What is the CGT annual exempt amount for 2026-27?

undefined The annual exempt amount is the amount of capital gains you can realise each tax year without paying CGT. For 2026-27, it's £3,000 for individuals. It's per person, not per disposal — so if you make multiple disposals in the same tax year, they all count towards the same £3,000. Married couples each have their own £3,000 allowance. The allowance is use-it-or-lose-it — it cannot be carried forward to future years. Relevant legislation: TCGA 1992 s.3(1) — annual exempt amount. The amount is set annually by statutory instrument; for 2025-26 it's £3,000.. Example: A higher-rate taxpayer who realises £3,000 of gains in 2025-26 pays £0 CGT. If they realise £5,000, they pay £480 CGT (£2,000 at 24%). If they don't use the allowance, it's lost. Common mistake: Forgetting that the allowance is per tax year (ending 5 April), not per calendar year. Many investors leave planning until March, then rush disposals before 5 April.

Can I transfer shares to my spouse to use their CGT allowance?

undefined Spouse transfers are a powerful CGT planning tool. When you transfer shares to your spouse, it's treated as a disposal at a price that produces neither a gain nor a loss (essentially, at your cost). Your spouse takes your cost base. When they sell, the gain is calculated from the original cost, but it's their annual exemption and tax rate that apply. This works best when one spouse is a higher-rate taxpayer and the other is a basic-rate taxpayer or non-taxpayer — the gain may be taxed at 18% instead of 24%, or even 0% if within their unused personal allowance. Relevant legislation: TCGA 1992 s.58 — transfers between spouses are on a no-gain/no-loss basis.. Example: A higher-rate husband with a £10,000 gain on shares transferred half to his wife (a basic-rate taxpayer). He sold his half: £5,000 gain, minus £3,000 exemption = £2,000 at 24% = £480 CGT. She sold hers: £5,000 gain, minus £3,000 exemption = £2,000 at 18% = £360 CGT. Total: £840 (vs £1,680 if sold entirely by him). Saving: £840. Common mistake: Transferring shares to a spouse without considering their own income and tax position. If the spouse is already a higher-rate taxpayer, the transfer saves nothing on the rate (both 24%) — but it still doubles the annual exemption.

Tax Advisory

CGT Annual Exemption Planning: Use It or Lose It

How to maximise the £3,000 CGT annual exempt amount each year to minimise capital gains tax.

Quick Answer

The CGT annual exempt amount is just £3,000 for 2026-27 (down from £12,300 in 2022-23). It cannot be carried forward — use it or lose it. Effective planning means making disposals each year to use the exemption, transferring assets to a spouse (doubling the allowance to £6,000 per couple), bed-and-ISA transactions, and harvesting losses before year-end. With the allowance now so low, annual planning is more important than ever.

Why Annual Exemption Planning Matters Now More Than Ever

The annual exempt amount (AEA) has been slashed: £12,300 (2022-23) → £6,000 (2023-24) → £3,000 (2024-25 onwards). This means a couple who previously could shield £24,600 of gains per year tax-free can now only shield £6,000.

With the allowance so low, every £1 of gain above £3,000 is taxed at 18% or 24%. If you have investment portfolios with significant unrealised gains, failing to use the annual exemption each year means those gains accumulate and will be taxed at a higher rate when you eventually sell.

Strategies to Maximise the Annual Exemption

Key strategies include:

Annual disposal: sell enough shares/assets each year to realise £3,000 of gain (then rebuy if desired — but beware the 30-day bed-and-breakfast rule)
Bed-and-ISA: sell shares and immediately rebuy within an ISA — uses the exemption AND shields future growth from CGT
Spouse transfer: gift assets to a spouse (tax-free) before selling — uses both annual exemptions (£6,000 per couple)
Loss harvesting: sell loss-making assets to crystallise losses, then reinvest in different (non-identical) assets
Timing across tax years: split large disposals across two tax years to use two annual exemptions
Spread disposals: if you have multiple assets, sell some each year rather than all at once

The Bed-and-Breakfast Rule

If you sell shares to use your annual exemption and then immediately buy them back, beware the 'bed-and-breakfast' rule. If you repurchase the same shares within 30 days, HMRC matches the repurchase against the sale — effectively cancelling the disposal for CGT purposes.

To avoid this, you can: (1) wait 31 days before repurchasing, (2) buy different shares (e.g., a different fund tracking the same index), or (3) use a bed-and-ISA transaction (sell in a general account, buy in an ISA — the ISA purchase is not matched against the sale).

Relevant Legislation

Annual exempt amount: TCGA 1992 s.3 (set at £3,000 by FA 2024). Bed-and-breakfast rule: TCGA 1992 s.106A (30-day matching). Spouse transfers: TCGA 1992 s.58 (no gain/no loss on transfers between spouses).

Practical Example

A couple with a £50,000 unrealised gain in a share portfolio had not used their annual exemption for 3 years. We advised selling £6,000 of gain each year (using both spouses' £3,000 exemptions) and rebuying within ISAs (bed-and-ISA). Over 3 years, they sheltered £18,000 of gains tax-free and moved £30,000 into ISAs, shielding all future growth from CGT.

Common Mistake

Not using the annual exemption because 'the gain isn't big enough to bother'. Even a £3,000 gain saves £720 (at 24%) per year, per person — £1,440 per couple. Over 10 years, that's £14,400 of unnecessary CGT if the exemption isn't used. The exemption cannot be carried forward — once the tax year ends on 5 April, it's gone forever.

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