UK Capital Gains Tax-Free Allowance 2026/27
Heads Up, Investors: The UK Capital Gains Tax-Free Allowance for 2026/27
Updated November 2026 for the 2026/27 tax year, including the 28 October 2026 Budget.
The UK Capital Gains Tax (CGT) allowance stays at just £3,000 for the 2026/27 tax year, the same as in 2024/25 and 2025/26. The Autumn Budget on 28 October 2026 left both the allowance and the main CGT rates unchanged.
Here’s what you need to know to stay ahead.
The Capital Gains Allowance: Still Just £3,000
The Capital Gains Tax allowance – officially known as the Annual Exempt Amount – is the amount of profit you can make from selling assets in a tax year before you have to pay any tax.
For the 2026/27 tax year (6 April 2026 to 5 April 2027), this allowance is:
- £3,000 for individuals
- £1,500 for most trusts
It was £12,300 in 2022/23, then cut to £6,000 in 2023/24 and to £3,000 from 2024/25. This trend means that even small investment gains that were previously tax-free might now result in a tax bill. 📉
What Happens if Your Profits Exceed the Allowance?
If your total capital gains in the tax year are more than £3,000, you’ll pay tax on the excess amount. The rate you pay depends on your Income Tax band. Since 30 October 2024, the same rates apply to shares, funds and residential property.
The CGT rates for 2026/27 are:
- 18% on gains that fall within your basic rate band
- 24% on gains above it (higher and additional rate taxpayers)
These rates apply to shares, funds held outside an ISA, and residential property that isn’t your main home.
Important: Your capital gains are added on top of your regular income. This means a large gain could push you into a higher tax bracket, and you’ll pay the higher rate of CGT on the portion of the gain that falls into that new bracket.
How to Protect Your Gains 🛡️
With the allowance now so low, smart planning is more crucial than ever. Here are a few key strategies to consider:
- Maximise Your ISA: This is your best defence! Any gains you make on investments held within a Stocks & Shares ISA are completely free from Capital Gains Tax. You can invest up to £20,000 each tax year.
- Use Your Pension: Like an ISA, any growth within your pension pot is sheltered from CGT.
- Think as a Couple: If you’re married or in a civil partnership, you can transfer assets to your partner without triggering a CGT event. This allows you to use both of your individual £3,000 allowances, potentially shielding up to £6,000 of gains per year.
- Harvest Your Gains Annually: Consider selling investments to realise gains up to the £3,000 annual limit. By “harvesting” your tax-free allowance each year, you can prevent a much larger, taxable gain from building up over time.
The key takeaway is that the goalposts have moved. The days of ignoring small investment profits are over. By understanding these changes and using the tax-efficient accounts available, you can keep more of your hard-earned money. 💰