UK Capital Gains Tax Rules (2026/27)

UK Capital Gains Tax was reshaped on 30 October 2024 in the Autumn Budget. The main rates moved from 10% / 20% to 18% / 24% across the board, the long-standing residential surcharge was removed, the Annual Exempt Amount sits at £3,000 having been cut from £12,300, and Business Asset Disposal Relief is mid-transition through a 10% to 14% to 18% rate schedule. This guide is the canonical 2026/27 reference for every individual disposal that crosses HMRC's Capital Gains Tax net, with worked numbers, the 60-day residential reporting rule, Section 104 share pooling, spousal transfer treatment, EIS / SEIS reinvestment, the NRCGT regime for non-residents and a full comparison of the pre-Autumn-2024 and post-Autumn-2024 rate schedules so you can value any disposal that straddled the change-of-rate date.

CGT is a YMYL topic and this guide is a general reference, not personal advice. Disposals worth five figures or more, business sales, gifts to family, property sales that straddle a rate change, and any cross-border element should be reviewed with a Chartered Tax Adviser or qualified accountant before contracts exchange. The qualifying conditions for reliefs are technical and the anti-forestalling rules on contract dates are now sharp.

1. Overview: what UK CGT is

Capital Gains Tax is the UK charge on the increase in value of capital assets between acquisition and disposal. It is governed by the Taxation of Chargeable Gains Act 1992 (TCGA 1992) and administered by HMRC alongside income tax. CGT is payable by individuals, trustees and personal representatives of deceased estates; companies do not pay CGT but pay corporation tax on their chargeable gains under a parallel computation in the Corporation Tax Acts.

The computation is, at its simplest, the disposal proceeds minus the allowable base cost (acquisition cost plus incidental costs of acquisition and disposal plus enhancement expenditure) minus any available reliefs minus the Annual Exempt Amount, with the net result taxed at the relevant CGT rate. Losses crystallised in the same tax year are set against gains before the AEA; losses brought forward from earlier years are set against any remaining gain after the current year's losses but only down to the level of the AEA, so the AEA is never wasted by carried-forward losses.

The CGT regime sits inside the income-tax framework in one important respect: the basic-rate and higher-rate CGT rates apply depending on where the chargeable gain falls when stacked on top of the individual's taxable income for the year. A taxpayer with taxable income inside the basic-rate band has any chargeable gain that would still sit within the basic band taxed at the lower CGT rate, and any spillover above the basic-rate threshold (now £50,270 across England, Wales and Northern Ireland; bands differ in Scotland for income tax but not for CGT) taxed at the higher CGT rate. Scotland's separate income-tax bands do not apply to CGT - the UK-wide £50,270 basic-rate ceiling is used.

The four big mechanical changes you need to know for 2026/27 are (1) the post-Autumn-2024 main rates of 18% / 24%, (2) the £3,000 Annual Exempt Amount (down from £12,300 just three years ago), (3) the BADR rate now stepping through 10% to 14% to 18% across three tax years, and (4) the 60-day residential property reporting and payment deadline that runs alongside the normal Self Assessment cycle. The rest of this guide walks each of those in detail.

2. Annual Exempt Amount: history and 2024 cut

The Annual Exempt Amount (AEA) is the slice of net chargeable gains exempt from CGT each tax year. It is a per-individual allowance, not transferable between spouses, and not capable of being carried forward to a later year if unused. Trusts get half the individual allowance, capped at the individual amount when split across multiple settlements with the same settlor.

The AEA was cut twice in two years under the Autumn Statement 2022. The pre-cut allowance of £12,300 for 2022/23 was halved to £6,000 for 2023/24 and halved again to £3,000 from 6 April 2024. The 2026/27 allowance remains at £3,000 with no inflation indexation. The £3,000 figure is fixed in the legislation and any future increase requires a new Finance Bill.

The recent history of the AEA, in full, is:

  • 2020/21: £12,300
  • 2021/22: £12,300
  • 2022/23: £12,300
  • 2023/24: £6,000
  • 2024/25: £3,000 (current cut takes effect)
  • 2025/26: £3,000
  • 2026/27: £3,000

The cut from £12,300 to £3,000 brought hundreds of thousands of small disposals into the CGT net for the first time. A buy-to-let investor selling a single property for a £10,000 gain used to fall entirely within the AEA and owed no tax. The same disposal now produces a chargeable gain of £7,000, which at the higher-rate residential 24% rate is £1,680 of tax that would not have been payable on the pre-2024 schedule. Small share-portfolio rebalancers and crypto traders face the same effect at the lower-gain end.

Reporting threshold. Even where no CGT is due, Self Assessment requires you to report your disposals if either the proceeds are above £50,000 (down from £49,200 historically) or the total chargeable gains before reliefs exceed the AEA. Both tests apply, so a low-gain disposal of an expensive asset still triggers a reporting obligation even if the AEA absorbs the gain. Residential property is a separate 60-day reporting regime (see section 8).

Order of use. Where the same year has gains taxed at different rates (eg some BADR-relieved at 18%, some main-rate residential at 24%), the AEA is allocated against the highest-taxed gain first - this maximises the tax saving for the taxpayer. Carried-forward losses are then deducted last, but only to the level that preserves the AEA: a loss carried forward cannot waste your AEA.

3. Rate schedule pre and post Autumn 2024

The Autumn Budget 2024 (30 October 2024) made the most significant structural change to UK CGT rates in over a decade. From 30 October 2024 the main rates were raised from 10% / 20% to 18% / 24%, and the long-standing residential property surcharge was removed. Residential gains had previously sat at 18% / 28% and were cut at the higher end (from 28% to 24%) while non-residential gains were raised across both bands. The new rates apply uniformly to both residential and non-residential disposals, other than carried interest (which has its own schedule and is being further reformed under separate provisions).

Post-Autumn-2024 rates (from 30 October 2024):

  • Basic-rate band: 18% on all chargeable gains (residential and non-residential)
  • Higher-rate band: 24% on all chargeable gains (residential and non-residential)
  • Trusts and personal representatives: 24% flat
  • BADR-qualifying gains: 14% for 2025/26, 18% from 6 April 2026
  • Investors' Relief-qualifying gains: same schedule as BADR
  • Carried interest: see separate schedule

Pre-Autumn-2024 rates (to 29 October 2024):

  • Non-residential basic-rate band: 10%
  • Non-residential higher-rate band: 20%
  • Residential basic-rate band: 18%
  • Residential higher-rate band: 28% (now 24%)
  • BADR-qualifying gains: 10% flat
  • Trusts and personal representatives: 20% non-residential / 28% residential

Why the changes mattered. The basic-rate non-residential rate doubled overnight from 10% to 18%, which is the steepest single change in the schedule and the one with the widest spread of affected taxpayers (small investors selling shares and crypto). The residential higher rate came down from 28% to 24%, the only meaningful rate cut in the package. The higher-rate non-residential rate rose from 20% to 24%, narrowing the historic gap between non-residential and residential at the top of the schedule.

The rate-change date in practice. The disposal date for CGT purposes is the date of an unconditional contract, not completion. A contract signed unconditionally on 29 October 2024 with completion on 15 November 2024 was a pre-change disposal and taxed at the older rate. A contract signed unconditionally on 31 October 2024 with completion on 15 November 2024 was a post-change disposal at the new rate. The Finance Act 2025 anti-forestalling rules also catch contracts entered before the announcement but completed afterwards where they lack a genuine commercial explanation.

Carried interest. The Autumn Budget 2024 raised the lower carried-interest rate from 18% to 18% (unchanged) and the higher rate from 28% to 32% as a transitional step ahead of the 2026 reform that brings carried interest into the income-tax regime entirely with a multiplier mechanism. Carried-interest gains are a niche structure used by private-equity and hedge-fund executives and are not covered further in this guide.

4. Disposal definitions

Section 21 TCGA 1992 defines the basic concept of a "chargeable asset" and the elaborations across sections 22 to 28 set out the events that constitute a "disposal". The principal categories are:

Sale. A sale at arm's length to a third party for cash or cash-equivalent consideration is the prototypical disposal. The disposal date is the date of an unconditional contract (section 28(1) TCGA 1992); for a conditional contract, the disposal date is the date the contract becomes unconditional (when the last suspensive condition is satisfied or waived). Completion is irrelevant to the disposal date for CGT.

Gift to a non-spouse. A gift is a disposal at market value under section 17 TCGA 1992. The donor is treated as having sold the asset for its market value at the date of gift, crystallising the gain, even though no cash actually changes hands. A gift to a spouse or civil partner living together is the no-gain-no-loss exception (section 58 TCGA 1992) and does not crystallise the gain. A gift to a child, sibling, friend or charity (charities have their own exemption) does crystallise the gain at market value.

Exchange. Exchanging one capital asset for another (eg trading one piece of fine art for another, or one cryptocurrency for another) is a disposal of the original asset and an acquisition of the new asset, both at the market value of the asset given up. Crypto-to-crypto trades are the most common modern example and are treated by HMRC as taxable disposals under the Cryptoassets Manual (CRYPTO22150).

Capital sum derived from the asset. Receiving a cash sum that derives from but does not transfer the asset (eg insurance proceeds for a damaged but not destroyed painting, or a compensation payment for an asset that has fallen in value) can be a part-disposal under section 22 TCGA 1992. The asset's base cost is split between the part-disposed proportion and the retained proportion using the standard formula in section 42 TCGA 1992.

Loss or destruction of an asset. If an asset is entirely lost, destroyed or has become of negligible value while still owned, the owner can either treat the event itself as a disposal under section 22 TCGA 1992 (where the loss involves a capital sum) or make a "negligible value claim" under section 24 TCGA 1992, which allows the owner to claim a loss as if the asset had been disposed of for its current negligible value while continuing to hold the worthless asset for any later windfall recovery. A negligible value claim can be backdated up to two tax years if the asset was of negligible value at that earlier date.

Death. Death is not a CGT disposal under section 62 TCGA 1992. Assets held at death pass to the personal representatives at market value with no CGT charge. This is the "tax-free uplift on death" that drives so much of UK estate planning - inheritance tax may apply, but accumulated CGT gains die with the deceased. The personal representatives or eventual beneficiaries take the assets with a fresh base cost equal to probate value, so a subsequent disposal only crystallises growth from the date of death onwards.

Compulsory purchase. A disposal under compulsory purchase is a disposal at the compulsory purchase award. Rollover relief under section 247 TCGA 1992 lets the proceeds be reinvested into a replacement asset to defer the gain.

5. PRR and Letting Relief

Private Residence Relief (PRR) under sections 222 to 226 TCGA 1992 is the single largest CGT exemption in the UK system, exempting every year an estimated £30-40 billion of accrued gains on main residences. It is automatic where the conditions are met and is not claimed - the exemption simply removes the gain from the CGT computation entirely.

The core test. A dwelling-house qualifies for PRR if the owner has occupied it as their only or main residence throughout the period of ownership. Where the dwelling has been the owner's only or main residence for only part of the period, relief is given pro-rata by reference to the qualifying occupation period as a fraction of the total ownership period, plus the final period of ownership (currently 9 months; 36 months where the owner has moved into long-term residential care or is disabled).

Multiple residences. An individual or married couple with more than one residence can elect under section 222(5) TCGA 1992 which is their main residence for CGT purposes. The election must be made within 2 years of the date there is a change in their pattern of residences. Without an election, HMRC determines the main residence based on the facts (where the family actually lives, where the correspondence is sent, where the children go to school, and so on).

Deemed occupation rules. Certain periods of absence are treated as occupation under section 223(3) and (4): up to 3 years for any reason; periods of work abroad of any length; up to 4 years where the owner is required to live elsewhere for the purposes of employment. The deemed occupation relief depends on the owner having actually occupied the property as a main residence both before and after the period of absence (the "sandwich rule"), except in the limited employment-abroad case.

Letting Relief: the 2020 reform. Before 6 April 2020, section 223(4) TCGA 1992 allowed a separate Letting Relief of up to £40,000 per owner where a property that had at some point been the owner's main residence was let out at any other time during the ownership period. The relief was widely claimed by buy-to-let landlords who had originally bought a property as a home and later let it out. From 6 April 2020 the relief was restricted to periods of "shared occupancy" - that is, periods during which the tenant occupied the property at the same time as the owner. In practice this restricts Letting Relief to the classic lodger case where a homeowner rents out a spare room while continuing to live there. A buy-to-let landlord who moved out before letting cannot claim the relief at all under the new rules.

PRR worked example. An owner buys a flat for £200,000 in January 2017 and sells it for £350,000 in January 2027 (a 10-year ownership, gross gain £150,000). The flat was her only main residence from January 2017 to January 2022 (5 years) and was then let out from January 2022 to January 2027 (5 years). PRR covers the 5 main-residence years plus the final 9 months, so 5.75 / 10 = 57.5% of the gain is relieved by PRR. The remaining 42.5% (£63,750) is chargeable, less the AEA, taxed at the higher-rate residential 24% (which is the same as the main higher rate). No Letting Relief is available because the owner did not share occupancy with the tenant. Total CGT roughly £14,580.

Garden, grounds and permitted area. PRR extends to the dwelling plus garden and grounds up to 0.5 hectares, plus any larger area HMRC accepts as required for the reasonable enjoyment of the property. Disposals of part of the garden as a building plot can fall outside PRR if the disposal post-dates the sale of the main house or if the area exceeds the permitted area ceiling.

6. BADR and Investors' Relief

Business Asset Disposal Relief (BADR), known until 6 April 2020 as Entrepreneurs' Relief, applies a reduced CGT rate to qualifying gains on the disposal of a trading business, the disposal of qualifying shares in a personal trading company, or post-cessation disposals of business assets within 3 years of cessation. The rate schedule is:

  • Disposals up to 5 April 2025: 10%
  • Disposals from 6 April 2025 to 5 April 2026: 14%
  • Disposals from 6 April 2026 onwards: 18%

The lifetime cumulative cap is £1 million per individual; gains above the cap revert to the main higher rate of 24%. The cap was £10 million from 2011 to 2020 and was cut to the current £1 million under the Spring Budget 2020 Entrepreneurs' Relief reforms. For company-share disposals the qualifying conditions require a 5% shareholding (with four prongs covering ordinary share capital, votes, distributable profits and assets on winding-up) and director-or-employee status maintained continuously for the 2 years ending on the disposal date.

Investors' Relief. Investors' Relief is a parallel relief for external investors in unlisted UK trading companies who hold ordinary shares subscribed for in cash since 17 March 2016 and held continuously for at least 3 years, where the investor is not (and has never been) a paid employee or officer. The rate moves on the same 10% / 14% / 18% schedule as BADR. The lifetime cap was cut from £10 million to £1 million on 30 October 2024 to align with BADR. The two caps are personal and separate - an active business owner who also makes external investments can theoretically stack both regimes for up to £2 million of lifetime relieved gains at 18%.

The full BADR ruleset including the four-prong shareholding test, the trading-status 20% test, associated disposals on personal property used by the business, and the Finance Act 2025 anti-forestalling rules are covered in the dedicated BADR guide. The summary here is for orientation only; any actual business-sale tax planning should use the deep-dive guide and qualified professional advice.

7. Hold-over relief on gifts

Hold-over relief defers the CGT charge on a gift by passing the donor's original base cost across to the donee. The eventual disposal of the asset by the donee then crystallises the held-over gain in addition to any further growth in the donee's hands. Two distinct statutory routes apply.

Section 165 TCGA 1992: business assets. Hold-over relief under section 165 is available on a gift of qualifying business assets - assets used in a trade carried on by the donor, shares in a personal trading company (broadly the same 5% test as BADR), and assets used in an unincorporated trade. The donor and donee must jointly elect for the relief on Form HS295. The donee inherits the asset at the donor's base cost and the donor crystallises no gain on the transfer. The donee's eventual disposal triggers the deferred gain at the rates then in force.

Section 260 TCGA 1992: chargeable transfers. Section 260 hold-over relief covers gifts that are immediately chargeable to inheritance tax (eg a gift into a discretionary trust) and gifts out of certain settlements. The relief operates on the same mechanism as section 165 - the donor's base cost passes to the donee or trustees, with no CGT crystallised on the transfer itself. Section 260 is the standard route for transferring assets into a trust for IHT-planning purposes without crystallising a CGT bill on the way in.

Restrictions. Hold-over relief cannot be used to give the asset to a non-resident donee where the donee would not be subject to UK CGT on a later disposal - this is the anti-avoidance rule that blocks emigration of accrued gains. The relief also reduces (or is disallowed) where the gifted shares in a personal company have non-trading activities or where the donor receives any actual consideration that exceeds the donor's base cost.

Hold-over vs sell-and-gift. Hold-over preserves the embedded gain inside the family. A donor who sells the asset to a third party and then gifts the cash crystallises the gain at the donor's CGT rate; the donee then receives unbeaten cash. A donor who gifts the asset and the donee then sells crystallises the gain at the donee's CGT rate, which may be lower if the donee is a basic-rate taxpayer. Combined with the no-gain-no-loss spousal transfer rule, this opens straightforward tax-saving structures within a couple. The donee's status, the holding period and the donee's intentions all matter to whether the structure is robust under HMRC scrutiny.

8. 60-day property reporting

Since 6 April 2020, UK residents disposing of UK residential property and crystallising a CGT charge must report and pay the tax within 60 days of completion (originally 30 days; extended to 60 days from 27 October 2021). This is the "CGT on UK property account" route, distinct from the normal Self Assessment cycle.

What triggers the obligation. The 60-day obligation arises on completion of a disposal of UK residential property where the disposal gives rise to a CGT liability. PRR-exempt disposals of main residences do not trigger a report. A disposal between spouses living together (no gain, no loss) does not trigger a report. A disposal at a loss does not trigger a report (but the loss can still be reported on the next Self Assessment return to use against future gains).

The mechanics. The seller registers for a Capital Gains Tax on UK property account at gov.uk, submits a return for the disposal with a computation of the gain and the tax due, and pays the tax by the 60-day deadline. Where the seller already files Self Assessment, the property gain must also appear on the Self Assessment return for the relevant tax year, and the 60-day payment is set off as a payment on account against the final tax. There is no double-counting.

Estimation issue. The 60-day deadline often falls before the seller knows their total income for the year, which affects whether the gain sits in the basic-rate or higher-rate CGT band. HMRC's approach is to report based on a reasonable estimate using the latest information then available, with the Self Assessment return reconciling the position when full figures are known. Underpayments at the 60-day stage do not attract a late-payment penalty if the underpayment was based on reasonable estimation.

Non-residents. Non-residents have been required to report UK property disposals in-year since 6 April 2015 (originally 30 days, now 60 days). The non-resident obligation applies to every UK land disposal, residential or non-residential, whether or not a tax charge arises - the report must be filed even on a no-gain disposal. The Non-Resident Capital Gains Tax (NRCGT) computation has its own rebasing options for property held at 5 April 2015 (residential) and 5 April 2019 (non-residential); see section 13.

Penalties for late filing. A late return attracts a £100 fixed penalty if up to 3 months late, a further £300 (or 5% of the tax, whichever is greater) if 6 months late, and another £300 (or 5%) if 12 months late. Late payment of the tax attracts daily interest at the HMRC late-payment rate plus surcharges at 30 days, 6 months and 12 months. The penalty regime is the same as for late Self Assessment returns under Schedule 55 FA 2009.

9. Share pooling: Section 104

Section 104 TCGA 1992 establishes the "share pool" mechanism for shares of the same class in the same company. Rather than identifying each individual share with a specific acquisition date and price, the legislation treats all same-class shares as a single asset with an averaged base cost. When the holder buys more shares of the same kind, the pool's quantity and total base cost both grow; when the holder sells, the disposal comes out of the pool at the average base cost per share. This eliminates first-in-first-out and last-in-first-out questions for the bulk of share transactions.

The three-step matching rule. Disposals are matched to acquisitions in this strict order:

  1. Same-day rule: shares acquired on the same day as the disposal are matched first.
  2. 30-day rule ("bed and breakfasting"): shares acquired in the 30 calendar days after the disposal are matched second. This rule blocks the historic tax-loss-harvesting trick of selling shares, claiming the loss, and immediately repurchasing the same shares.
  3. Section 104 pool: any remaining disposal is matched against the Section 104 pool at the pooled average base cost.

Worked pooling example. A taxpayer buys 1,000 shares in Co X at £4 each on 1 March 2024 (£4,000 cost). He buys another 500 shares at £6 each on 1 June 2024 (£3,000 cost). The Section 104 pool now holds 1,500 shares at a total base cost of £7,000, average base cost £4.67. On 1 December 2024 he sells 800 shares at £10 each (£8,000 proceeds). The disposal comes entirely out of the pool: 800 shares × £4.67 = £3,733 base cost withdrawn, leaving 700 shares in the pool at £3,267 (rounded). The chargeable gain is £8,000 - £3,733 = £4,267. If, instead, the taxpayer bought 200 more shares at £9 on 15 December 2024 (within 30 days after the disposal), those 200 shares would be matched first to the 1 December sale under the 30-day rule, then the remaining 600 disposed shares would come from the pool.

Pre-1998 holdings: the 1982 pool and FA 1985 pool. Older share holdings sit in additional pools created by past reforms. Shares acquired before 31 March 1982 sit in the "1982 pool" and are deemed to be acquired at their 31 March 1982 market value. Shares acquired between 1 April 1982 and 5 April 1998 sit in the "FA 1985 pool" with indexation allowance frozen at the December 2017 RPI level. Disposals are matched first against the same-day acquisitions, then the 30-day window, then the Section 104 pool, then the FA 1985 pool, then the 1982 pool. Most modern investors only ever touch the Section 104 pool but long-held family share portfolios can need the historical pools.

Cryptoassets. HMRC's Cryptoassets Manual at CRYPTO22150 confirms that tokens of the same type are pooled under the same Section 104 / same-day / 30-day rules. Bitcoin is treated as one type, Ether another; an ERC-20 token is its own type. Each token type has its own pool. A crypto-to-crypto trade is a disposal of one pool and an acquisition into another, both at the GBP-equivalent market value at the date of trade. The same matching rules apply, so a sale and rebuy of the same token within 30 days is caught by the 30-day rule and any claimed loss is disallowed against the rebuy. See the UK crypto tax guide for the full mechanics.

10. Spousal transfers and exemptions

Section 58 TCGA 1992 provides that disposals between spouses or civil partners who are living together in the relevant tax year take place at a price that gives rise to neither a gain nor a loss. The receiving spouse inherits the original base cost (and acquisition date for indexation-pool purposes). The transfer itself is therefore CGT-neutral, but it opens material planning opportunities for the eventual disposal to a third party.

Why it matters. Each spouse has their own £3,000 Annual Exempt Amount, their own basic-rate CGT band, and their own BADR / Investors' Relief lifetime cap. By transferring a part-share of a planned disposal asset to a lower-rate-paying spouse before the eventual sale to a third party, a couple can halve their effective pre-tax saving on the AEA, place more gain in the basic-rate CGT band, and double the BADR / IR lifetime cap. The transfer must be a genuine outright transfer of beneficial ownership - not a sham retained by the original owner.

Other CGT exemptions. A short list of the structural CGT exemptions outside the AEA and the main reliefs:

  • Main residence (PRR): covered in section 5.
  • ISA wrapper: gains and income inside an ISA are wholly exempt from UK CGT and income tax.
  • Pension wrapper: gains inside SIPPs and other registered pension schemes are exempt from CGT.
  • UK government securities ("gilts"): gains on gilts are exempt from CGT under section 115 TCGA 1992. Losses are not allowable either.
  • Qualifying corporate bonds (QCBs): generally exempt from CGT, with the corollary that losses are not allowable.
  • Wasting chattels: tangible movable property with a predictable useful life of 50 years or less (eg cars, yachts, machinery) is exempt under section 45 TCGA 1992.
  • Chattels under £6,000: tangible movable property disposed of for £6,000 or less is exempt under section 262 TCGA 1992.
  • Gambling winnings: not chargeable assets.
  • Compensation for personal injury or wrong: exempt under section 51 TCGA 1992.
  • EIS / SEIS gain on qualifying shares held for 3 years: exempt entirely.
  • VCT shares within £200,000 annual subscription limit: exempt.
  • Charitable disposals: a gift to a UK charity is exempt under section 257 TCGA 1992.

Death. Death is not a CGT disposal under section 62. Heirs take the assets at probate value. This is sometimes called the "CGT free uplift on death" and is one of the largest interactions between CGT and IHT planning.

11. Worked examples

Four scenarios using the post-Autumn-2024 rates and the £3,000 AEA for 2026/27. All figures rounded to the nearest pound.

11.1 Share gain at higher rate

A higher-rate-paying individual sells listed shares for a net chargeable gain of £25,000 in 2026/27. She has no other gains in the year.

  • Total gain: £25,000
  • Annual Exempt Amount: £3,000
  • Taxable gain: £22,000
  • CGT at 24%: £5,280

Effective rate on the gross gain: 21.12%. The same gain in 2022/23 (£12,300 AEA, 20% rate) would have been £2,540 of tax - a £2,740 increase driven mostly by the rate change with a small contribution from the AEA cut.

11.2 Second-home sale

A higher-rate-paying buy-to-let landlord sells a second home for a net chargeable gain of £80,000 in 2026/27. The property was never her main home, so PRR is not available.

  • Total gain: £80,000
  • Annual Exempt Amount: £3,000
  • Taxable gain: £77,000
  • CGT at 24%: £18,480
  • Pre-Autumn-2024 CGT at 28%: £21,560
  • Net rate-cut saving: £3,080

This is the one case in the Autumn 2024 package where the taxpayer was better off after the change: the higher-rate residential CGT rate dropped from 28% to 24%. The CGT bill is reportable and payable within 60 days of completion via the HMRC CGT on UK property account.

11.3 BADR-qualifying business sale

A sole trader sells a qualifying trading business in 2026/27 for a net gain of £600,000. He has used no BADR lifetime allowance previously and meets all the qualifying conditions.

  • Total gain: £600,000
  • BADR-relieved gain (within £1m cap): £600,000
  • CGT at BADR rate of 18%: £108,000
  • Hypothetical CGT without BADR at 24%: £144,000
  • BADR saving: £36,000

The £36,000 saving on a £600,000 gain is a six-percentage-point effective relief. The AEA is ignored here for arithmetic clarity - in practice it would be allocated against the BADR-relieved gain to reduce the tax by £540 (£3,000 × 18%). The fuller worked BADR mechanics including the four-prong shareholding test, trading-status test and pre-2026 rate windows sit in the dedicated BADR guide.

11.4 Gain spanning basic and higher CGT bands

A basic-rate income-tax payer with £35,000 of taxable employment income (taxable income after personal allowance: £22,430) sells a buy-to-let flat for a £40,000 gain in 2026/27. Her remaining basic-rate band is £15,270 (£50,270 basic-rate ceiling minus her £35,000 income).

  • Total gain: £40,000
  • Less Annual Exempt Amount: £3,000
  • Taxable gain: £37,000
  • Falling in basic-rate band (taxed at 18%): £15,270 = £2,748.6
  • Falling in higher-rate band (taxed at 24%): £21,730 = £5,215.2
  • Total CGT: £7,963.8

Blended effective rate on the gross gain: 19.91%. Note that the gain is added to income for band-allocation purposes only - it does not push more of the income itself into the higher-rate band; income tax sees only the £35,000 employment figure. The post-Autumn-2024 alignment of the residential and main rates means there is no longer a separate basic-rate residential rate at 18% to worry about - the same 18% applies to both kinds of asset.

12. EIS / SEIS reinvestment and VCT

The Enterprise Investment Scheme (EIS), the Seed Enterprise Investment Scheme (SEIS) and Venture Capital Trusts (VCT) all have interactions with the CGT regime that go beyond the headline income-tax reliefs.

EIS deferral relief. Section 150C and Schedule 5B TCGA 1992 let an investor defer a chargeable gain on any asset by reinvesting an equivalent amount of cash into qualifying EIS shares. The qualifying window is one year before to three years after the original disposal. The deferred gain crystallises when the EIS shares are themselves disposed of, at the CGT rate then in force. EIS deferral is therefore a pure deferral, not an exemption. The benefits are the time value of money on the deferred tax and the opportunity to wait for a future lower CGT rate or a year with available AEA.

SEIS reinvestment relief. SEIS reinvestment relief under Schedule 5BB TCGA 1992 is significantly more generous. An investor who realises a chargeable gain in a tax year and reinvests the gain (up to the £200,000 SEIS subscription cap) into qualifying SEIS shares in the same tax year can exempt 50% of the reinvested gain permanently. The other 50% remains chargeable in the normal way. SEIS reinvestment relief is the only CGT relief that combines a partial permanent exemption with the underlying EIS-style 50% income-tax relief on the same subscription.

EIS and SEIS gain exemption. Disposal of EIS or SEIS shares held for the qualifying period (3 years from the later of issue and the date the trade started; 3 years for SEIS) is exempt from CGT on the gain, provided the income-tax relief was actually given on the original subscription. This is separate from the deferral / reinvestment reliefs above and is the headline CGT benefit of investing in qualifying schemes.

VCT. Disposals of VCT ordinary shares within the £200,000 annual subscription limit are exempt from CGT (gains and losses both fall outside the regime), with no minimum holding period required for the CGT exemption itself. The 30% VCT income-tax relief however requires a 5-year holding to avoid clawback. There is no reinvestment relief for VCT subscriptions. Use the dedicated EIS / SEIS deep dive guide for the qualifying-trade rules, the disqualifying activities list, withdrawal of relief on subsequent events, and the practical risk-capital framing of these schemes.

13. NRCGT for non-residents

Non-UK residents have been chargeable to UK CGT on disposals of UK residential property since 6 April 2015 and on all UK land (residential and non-residential) plus indirect disposals of UK property-rich entities since 6 April 2019. The regime is called Non-Resident Capital Gains Tax (NRCGT) and operates alongside the main CGT regime with a few important differences.

What is chargeable. A non-resident is chargeable on the disposal of:

  • UK residential property held directly (since 6 April 2015)
  • UK non-residential land and buildings (since 6 April 2019)
  • Indirect disposals of "UK property-rich" companies and other entities (since 6 April 2019), where the disposing person holds at least 25% of the entity and the entity derives at least 75% of its gross asset value from UK land

Rebasing. A non-resident holding UK residential property at 5 April 2015 can elect to compute the gain by reference to the property's 5 April 2015 market value, so only the post-2015 growth is chargeable. A non-resident holding UK non-residential land at 5 April 2019 can elect to compute the gain by reference to the 5 April 2019 market value. Alternatives are time-apportionment (a straight-line pro-rata of the gain across the holding period) and the full-gain approach using the original acquisition cost. The choice is per disposal, not per holding, and is normally driven by which method produces the lowest chargeable gain.

Rates. NRCGT applies the same post-Autumn-2024 rates as resident CGT: 18% in the UK basic-rate band and 24% above. Where the non-resident has no UK income and therefore no "income occupying" the basic-rate band, the entire chargeable gain after the AEA falls in the basic-rate band up to £37,700 and the higher band thereafter. NRCGT-chargeable individuals are entitled to the same £3,000 AEA as residents.

Reporting. Every NRCGT disposal must be reported within 60 days of completion using the HMRC CGT on UK property account, regardless of whether a tax bill arises. This is stricter than the resident regime, where only chargeable disposals trigger a 60-day filing. A non-resident must report the no-gain or loss disposal as well as the chargeable one. Failure to file attracts the same Schedule 55 FA 2009 penalty regime as Self Assessment.

Interaction with the Statutory Residence Test. The NRCGT regime applies to anyone non-resident under the Statutory Residence Test (SRT) at the time of disposal, even where the individual was UK resident at the time of acquisition. A "temporary non-resident" who returns to UK residence within 5 years can be treated as having made the disposal in the year of return under section 10A TCGA 1992, bringing the gain into the main CGT regime. The temporary non-resident rule blocks simple emigration-and-return tax structures.

14. Frequently asked questions

What are the UK Capital Gains Tax rates for 2026/27?
From 30 October 2024 the main UK Capital Gains Tax rates are 18% within the basic-rate income band and 24% above it, applied uniformly to both residential and non-residential assets (other than carried interest). Before Autumn 2024 the main rates were 10% / 20% on non-residential assets and 18% / 28% on residential property. The residential surcharge was removed and the main rates were raised in step so that the residential 24% rate matches the main higher rate, and the basic-rate 18% is unchanged for residential but raised from 10% to 18% for non-residential.
What is the Annual Exempt Amount for CGT in 2026/27?
The Annual Exempt Amount (AEA) is £3,000 per individual for 2024/25, 2025/26 and 2026/27. It was £6,000 in 2023/24 and £12,300 in 2022/23 before the two-step cut announced in the Autumn Statement 2022. The AEA is a tax-free slice of net chargeable gains, used in priority order against the highest-taxed gains, and it cannot be carried forward or transferred between spouses or civil partners. Trusts get half the individual AEA (£1,500 for 2026/27).
What is the 60-day property reporting deadline?
If you sell or dispose of UK residential property and a CGT liability arises, you must report and pay the tax within 60 days of completion using the HMRC Capital Gains Tax on UK property account (the "CGT PPD" service). The window was 30 days from 6 April 2020 to 26 October 2021 and was extended to 60 days from 27 October 2021. The deadline runs from the date of completion, not exchange. Non-residents have reported in-year since 6 April 2015 (originally 30 days, now 60 days) and must report every disposal regardless of whether a tax bill arises.
What counts as a disposal for CGT?
A disposal for CGT purposes includes selling an asset, gifting an asset (other than to a spouse or civil partner), exchanging one asset for another, receiving a capital sum derived from the asset, the entire loss or destruction of the asset, and making a negligible value claim where an asset still owned has become of negligible value. Spousal and civil-partner transfers are no-gain-no-loss, so they do not crystallise a gain - the receiving spouse inherits the original base cost. Death is not a CGT disposal, and assets are revalued to market value in the deceased estate.
How does Private Residence Relief work?
Private Residence Relief (PRR) under sections 222-226 TCGA 1992 exempts the gain on your main residence in full where the property has been your only or main home throughout your period of ownership. Where the property was only your main home for part of the period, relief is given pro-rata, plus a final period of 9 months (36 months if you are disabled or in a care home) that is treated as deemed occupation. Letting Relief is now restricted to periods of shared occupancy with the tenant and is rarely available since 6 April 2020.
What is Letting Relief after the 2020 reform?
Letting Relief from 6 April 2020 is restricted to periods during which the owner shared occupancy with the tenant - the classic "lodger" case. Before April 2020 it gave up to £40,000 per owner of additional CGT relief for any property let out that had at some point been a main residence, which was a substantial tax break for buy-to-let landlords who had previously lived in their property. Most BTL landlord scenarios that historically claimed Letting Relief no longer qualify, so the only PRR relief available is the proportion of ownership during which the owner actually lived there as a main home plus the 9-month final-period rule.
How does Section 104 share pooling work?
Section 104 of TCGA 1992 requires shares of the same class in the same company to be treated as a single asset (the "Section 104 pool") with an average base cost. When you buy more shares of the same kind, the pool grows in quantity and the total base cost is averaged. When you sell, the disposal is made out of the pool at the average base cost. Two ordering rules override the pool: any same-day acquisition matches first, then any acquisition within the 30 days after the disposal (the bed-and-breakfasting rule) matches second, and only the residual disposal comes out of the Section 104 pool.
What is the same-day and 30-day rule for shares?
When you sell shares, HMRC matches the disposal in this order: (1) shares acquired on the same day as the disposal; (2) shares acquired in the 30 days following the disposal (the "bed and breakfast" rule that blocks sell-and-rebuy tax-loss harvesting); and (3) any remaining disposal comes out of the Section 104 pool of all earlier same-class shares at the pooled average base cost. The same rules apply to cryptoassets of the same kind under HMRC Cryptoassets Manual CRYPTO22150, with the Section 104 pool replaced by the "pool of tokens" of the same type.
What is hold-over relief on gifts?
Hold-over relief under section 165 TCGA 1992 lets a donor of qualifying business assets defer the CGT gain by transferring the original base cost to the donee, who then takes the asset with the donor's lower base cost. Section 260 hold-over relief covers transfers into and out of certain settlements and gifts on which inheritance tax is chargeable. Both reliefs are claimed jointly by donor and donee. The relief defers tax rather than eliminating it - the eventual disposal of the asset by the donee crystallises the held-over gain at the rate then in force.
How does Business Asset Disposal Relief reduce my CGT?
Business Asset Disposal Relief (BADR), formerly Entrepreneurs' Relief, applies a reduced CGT rate to qualifying gains on the disposal of a trading business, qualifying shares in a personal trading company (5% holding and officer/employee for 2 years), or post-cessation business assets within 3 years of cessation. The rate is 18% from 6 April 2026, applied to a lifetime cumulative cap of £1 million per individual. The rate stepped up from 10% (pre 6 April 2025) to 14% (2025/26) to 18% (2026/27 onwards), announced in the Autumn Budget 2024.
What is the difference between EIS reinvestment relief and SEIS reinvestment relief?
EIS deferral relief defers the CGT on a gain by reinvesting the gain into qualifying EIS shares within the qualifying window (1 year before to 3 years after the disposal). The gain crystallises when the EIS shares are disposed of, so EIS is a pure deferral. SEIS reinvestment relief exempts 50% of a reinvested gain (up to £200,000 of gain reinvested) provided the SEIS shares qualify - that 50% is permanently relieved, not just deferred. Both reliefs sit alongside the EIS/SEIS income-tax reliefs and the EIS/SEIS gain exemption on the qualifying shares themselves.
Do VCT shares attract Capital Gains Tax?
No. Disposals of Venture Capital Trust (VCT) ordinary shares within the £200,000 per tax year subscription limit are exempt from CGT, both gains and losses, with no minimum holding period for the exemption itself. The 30% VCT income-tax relief, however, requires a 5-year holding to avoid clawback. There is no reinvestment relief for VCT subscriptions - they sit alongside the EIS/SEIS gain-deferral regime rather than inside it.
Do non-residents pay UK Capital Gains Tax?
Non-UK residents pay CGT on disposals of UK land and property (including indirect disposals of UK property-rich entities) under the Non-Resident Capital Gains Tax (NRCGT) regime extended to all UK land from 6 April 2019. Every NRCGT disposal must be reported within 60 days of completion regardless of whether a tax bill arises. Rebasing options are available for residential property held at 5 April 2015 and for non-residential property held at 5 April 2019, so the chargeable gain is generally the post-rebasing growth rather than the full historical appreciation.
Can I transfer assets between spouses to use both annual exemptions?
Yes. Transfers of assets between spouses or civil partners living together are no-gain-no-loss disposals (section 58 TCGA 1992), so the receiving spouse inherits the original base cost. This means each spouse can use their own £3,000 Annual Exempt Amount and their own basic-rate CGT band on a future sale. The technique is widely used to halve the effective CGT on a planned disposal where one spouse has spare basic-rate capacity. The transfer must be genuine and not part of an arrangement immediately followed by a sale to a third party that was already binding before the transfer.
When is CGT due if it is not a property disposal?
For non-property disposals reported through Self Assessment, CGT for a tax year is due by 31 January following the end of the tax year. A disposal in tax year 2026/27 (6 April 2026 to 5 April 2027) has CGT due by 31 January 2028, alongside any income-tax balancing payment for the same year. Residential property disposals follow the separate 60-day reporting and payment regime through the HMRC CGT on UK property account. The Self Assessment return for the year still includes the property gain, and the 60-day payment is set off as a payment on account.

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