CGT Allowance 2026/27: £3,000 Annual Exempt Amount Explained

Q What is the CGT allowance for 2026/27?

£3,000 per individual per tax year - the "Annual Exempt Amount" (AEA) set by Section 1K TCGA 1992. This is the slice of total capital gains in a tax year that's tax-free. It has been £3,000 since 6 April 2024. Section 1K(2) sets £3,000, with effect for 2024/25 and later years (Finance Act 2023 s.8(5)), with no end date, and the CPI indexation rule in section 1L was repealed by Finance Act 2023 s.8(6), so the amount stays at £3,000 until a future Finance Act changes it. It applies to gains from ALL asset types combined - shares, crypto, property, business assets, art - not £3,000 per asset. Each individual gets their own AEA - a married couple has 2 × £3,000 = £6,000 combined for jointly-owned assets. If you don't use the AEA in a tax year, it's LOST - no carry-forward (unlike pension Annual Allowance which has 3-year carry-forward).

Q How has the CGT allowance changed in recent years?

Two cuts, both announced at Autumn Statement 2022 and legislated by Finance Act 2023 s.8. 2022/23: £12,300. 2023/24: £6,000 (s.8(2)-(3)). 2024/25 onwards: £3,000 (s.8(4)-(5), "for the tax year 2024-25 and subsequent tax years"). The same section repealed section 1L TCGA 1992, which used to raise the AEA each year in line with CPI, so £3,000 applies for 2025/26, 2026/27 and later years with no end date until Parliament changes it. In cash terms that is a 75.6% cut from £12,300 to £3,000 (legislation.gov.uk, Finance Act 2023 s.8, retrieved 2026-10-20).

Q Is the £3,000 allowance per asset or per person?

Per person, per tax year. Applies to TOTAL gains from all asset types in that year - shares, crypto, BTL, art, jewellery, business asset disposals - all combined. So a year with £4,000 of share gains + £2,000 of crypto gains = £6,000 total gains, £3,000 AEA covers half, £3,000 is taxable. NOT £3,000 per asset class. The "per person" part matters for couples and trusts: each individual has their OWN £3,000, so married couples / civil partners can combine to £6,000 when jointly owning assets. Trusts have a HALF allowance (£1,500) under Schedule 1C para 5 TCGA 1992 (trusts for a disabled person get the full amount) - a single discretionary trust gets £1,500 not £3,000. Where the same settlor has made several qualifying UK settlements (UK-resident trustees, not charitable or pension trusts, Sch 1C para 7), the £1,500 is divided equally between them, but no trust gets less than one-tenth of an individual's amount (£300) under the Schedule 1C para 6 "trust grouping" rules.

Q Can I split the allowance with my spouse?

Yes - inter-spouse asset transfers are at "no gain, no loss" under Section 58 TCGA 1992 (or Section 18 IHTA 1984 spousal exemption parallel for inheritance). You can transfer ownership of shares, property, or other assets to your spouse / civil partner BEFORE disposal, then both of you use your own £3,000 AEA when the asset is later sold. Worked example: husband has £30,000 unrealised gain on a share portfolio. Transfers 50% to wife (no CGT on transfer). Both sell in same tax year: husband £15k gain - £3k AEA = £12k taxable; wife £15k gain - £3k AEA = £12k taxable. Combined £24k taxable vs £27k taxable if sold alone. AEA savings: £3,000 × CGT rate = £540-£720 depending on band. Bigger savings if one spouse is basic-rate (18% CGT) vs the other higher-rate (24% CGT). Inter-spouse transfer must be ABSOLUTE (not held in trust for the original owner) and must happen BEFORE exchange of contracts on sale.

Q What if my total proceeds exceed £50,000 but my gain is under £3,000?

You must STILL report the disposal to HMRC even though no CGT is due, because your proceeds are over the reporting limit in section 8C Taxes Management Act 1970. That limit used to be four times the AEA; Finance Act 2023 section 8 replaced it with a fixed £50,000 from 2023/24, so it did not fall when the AEA was cut to £3,000. Report via Self Assessment SA108 supplementary pages, even if your taxable gain after AEA is zero. Worked example: sold £55,000 of shares with £2,500 gain. No CGT due (under AEA). But proceeds > £50k = report on SA108 anyway. UK residential property disposals MUST be reported within 60 days regardless of gain via the UK Property Disposal service - that's a separate filing track from the SA108 annual return.

Q How do I use the AEA strategically?

Four common techniques. (1) Spread disposals across tax years: sell £6,000 of shares on 5 April + £6,000 on 6 April = total disposal spread across two tax years = 2 × £3,000 AEA used vs £3,000 for a single-day sale. Sometimes called "Bed and ISA" pattern when combined with re-buying inside an Individual Savings Account (ISA). (2) Joint-name assets: hold investments jointly with spouse to access 2 × AEA at disposal. (3) "Bed and Spouse": transfer asset to basic-rate spouse before disposal so they use their own AEA + lower 18% CGT rate. (4) Loss harvesting: sell losing positions in the same tax year as your big gain to offset (Section 16 TCGA). Capital losses unused this year carry forward indefinitely against future gains. NOT a strategy: "Bed and Breakfast" (sell and re-buy same asset within 30 days) - blocked by Section 106A TCGA 1992 (the 30-day rule, inserted by FA 1998). Re-buying after 31+ days, or buying inside an ISA, works.

Q Are some disposals exempt from CGT entirely?

Yes - several. Your main residence: covered by Private Residence Relief (PRR), Section 222-226A TCGA, no CGT if it's been your main home throughout ownership. Cars: private cars are exempt under Section 263 TCGA. Personal possessions (chattels) under £6,000: exempt under Section 262 TCGA (full exemption below £6k disposal value; partial relief between £6k and £15k). ISA assets: no CGT on shares / funds sold inside an ISA wrapper. Pension assets: no CGT inside a pension (SIPP, workplace pension). Seed Enterprise Investment Scheme (SEIS) investments: full CGT exemption on a gain if held 3+ years and SEIS Income Tax relief is attributable to the shares (Section 150E TCGA 1992). Enterprise Investment Scheme (EIS) investments: gains on the EIS shares themselves are exempt if held 3+ years AND received Income Tax relief on subscription. Gifts to charities and qualifying bodies: exempt under Section 257 TCGA. Inter-spouse transfers: no-gain-no-loss as discussed. Government bonds (gilts): exempt under Section 115 TCGA.

Q What are the CGT rates after the AEA is used up?

Following Autumn Budget 30 October 2024, rates for 2026/27 are: 18% on gains within your unused basic-rate band (after stacking on top of income up to £50,270), 24% on gains above the £50,270 threshold. These rates apply to all asset types (shares, crypto, residential property, other assets) for disposals on or after 30 October 2024, when Finance Act 2025 s.7 raised the general rates from 10%/20% to 18%/24% and removed the separate residential property rates. Residential property had already moved from 18%/28% to 18%/24% on 6 April 2024 (Finance (No. 2) Act 2024 s.6). Business Asset Disposal Relief (BADR): 18% on qualifying gains up to the £1m lifetime limit for disposals on or after 6 April 2026 (up from 14% in 2025/26 and 10% before 6 April 2025, Finance Act 2025 s.8). Trustees and personal representatives pay a single 24% rate (TCGA 1992 s.1H(6) and (8)).

Q How does the AEA interact with capital losses?

The order is set by statute and is not optional. Losses of the same tax year are deducted from that year's gains first, in full (TCGA 1992 s.1(3)(a)), and the AEA comes after them (s.1K(4)(a)). That can waste some or all of the AEA: £8,000 of gains and £6,000 of same-year losses leave £2,000, the AEA covers it, and the unused £1,000 of AEA is lost because the AEA is deducted "no further than necessary" (s.1K(1)) and cannot be carried forward. You cannot choose to keep a same-year loss back for a later year. Losses brought forward from earlier years are deducted after the AEA (s.1K(4)(b)), so they are used only to reduce the remaining gain to nil and the rest carries on forward under s.1(3)(b): with £10,000 of net gains and £20,000 of losses brought forward, the AEA covers £3,000, £7,000 of the brought-forward losses are used and £13,000 carry forward. A year where losses exceed gains produces no tax and the AEA is unused (HMRC Capital Gains Manual CG21520, examples 2 and 3). Because same-year losses cannot be held back, timing a loss-making sale into a different tax year from a small gain is the only way to stop it absorbing gains the AEA would have covered anyway.

Q What is the deadline to file a CGT return?

Two separate filing tracks. Annual Self Assessment: file SA108 with your main SA100 return by 31 January after the end of the tax year. So 2026/27 tax-year disposals: report and pay by 31 January 2028. Online filing only via gov.uk SA. UK residential property 60-day reporting: from April 2020, disposals of UK residential property MUST be reported within 60 days of COMPLETION (not exchange) via HMRC's UK Property Disposal online service. This is on TOP of annual SA filing - you ALSO include the disposal on your SA108 year-end return with any reconciliation. Penalties for missing 60-day deadline: £100 fixed + £10/day after 3 months + 5% of tax due at 6 / 12 months. Penalties for missing SA deadline: £100 fixed + £10/day after 3 months + £300 at 6 months + £300 at 12 months. Neither penalty is escape-able by paying the tax later - they're triggered by the FILING delay, not the payment delay.

Q Do I have to pay CGT on overseas asset disposals?

Depends on UK residence status. UK residents: pay UK CGT on worldwide disposals (gain crystallisation rule applies regardless of where the asset is located). Foreign Tax Credit Relief usually offsets any foreign CGT paid up to your UK liability on the same disposal. UK non-residents: CGT generally NOT due on disposals of UK assets (with major exceptions for UK property since 2015 and UK indirect property holdings since 2019). Non-resident CGT on UK residential property uses standard 18%/24% rates with the same AEA. Temporary non-residents: you are "temporarily non-resident" if you had sole UK residence for at least 4 of the 7 tax years immediately before the year you left and your period of non-residence is 5 years or less (Finance Act 2013 Sch 45 para 110(1)). It is measured as a period of 5 years, not a count of tax years. If so, gains and losses on disposals made during the non-resident period are treated as accruing in the period of return (TCGA 1992 s.1M(1)), so they are taxed when you come back, except gains on certain assets acquired while you were non-resident, which s.1N excludes. Anti-avoidance against pure relocation-for-disposal patterns. See our UK residence (SRT) guide for the residence test mechanics.

Q Are there any planned changes to the CGT allowance?

None is legislated. Section 1K(2) TCGA 1992 sets £3,000, with effect for 2024/25 and later years (Finance Act 2023 s.8(5)), with no end date and, since Finance Act 2023 s.8(6) repealed section 1L, no inflation increase, so it stays at £3,000 unless a future Finance Act changes it. The main recent CGT reform was to the rates, not the allowance: the residential higher rate fell from 28% to 24% on 6 April 2024 (Finance (No. 2) Act 2024 s.6) and the general rates rose from 10%/20% to 18%/24% for disposals from 30 October 2024 (Finance Act 2025 s.7), giving the same 18%/24% for all asset types.