The UK Capital Gains Tax Annual Exemption Explained: £3,000 Allowance, 18% / 24% Rates (2026/27)

What Capital Gains Tax is charged on

Capital Gains Tax (CGT) applies when you dispose of an asset that has increased in value. It's the gain you make that's taxed, not the amount of money you receive (gov.uk).

HMRC illustrates the arithmetic on a painting: if you bought a painting for £5,000 and sold it later for £25,000, you've made a gain of £20,000 (gov.uk).

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The Annual Exempt Amount

Each tax year, an individual has a tax-free allowance below which no CGT is due. You only have to pay Capital Gains Tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount) (gov.uk).

The Capital Gains tax-free allowance is: £3,000 (gov.uk). Trusts have a separate lower figure of £1,500 for trusts (gov.uk).

If total gains for the tax year sit below the allowance, no CGT is payable. You also do not have to pay Capital Gains Tax if all your gains in a year are under your tax-free allowance (gov.uk).

What counts as a disposal

The gain does not have to come from a sale. Disposing of an asset includes: selling it, giving it away as a gift, or transferring it to someone else, swapping it for something else, getting compensation for it (gov.uk).

A gift to a spouse or civil partner is treated separately in the CGT rules and generally does not trigger the charge, but the general position for other transfers is that CGT can apply on the difference between market value and cost.

The rates from 6 April 2026

If you're a higher or additional rate taxpayer, you'll pay 24% on your gains from 6 April 2026 (gov.uk).

If you're a basic rate taxpayer, the rate you pay on gains you receive from 6 April 2026 depends on the size of your gain and your taxable income (gov.uk).

Two rates apply on the same gain if it straddles the basic band:

• If this amount is within the basic Income Tax band, you'll pay 18% on your gains made from 6 April 2026 (gov.uk).
• For any amount above the basic Income Tax band, you'll pay 24% on gains made from 6 April 2026 (gov.uk).

HMRC worked example — gain within the basic band

HMRC publishes two worked examples on the CGT rates page. The first shows a gain that fits entirely inside the basic Income Tax band:

• Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £12,600 (gov.uk).
• For the 2026 to 2027 tax year the allowance is £3,000, which leaves £9,600 to pay tax on (gov.uk).
• Because the combined amount of £29,600 is less than £37,700 (the basic rate band for the 2026 to 2027 tax year), you pay Capital Gains Tax at 18% (gov.uk).
• This means you'll pay £1,728 in Capital Gains Tax (gov.uk).

HMRC worked example — gain straddling the bands

The second HMRC example shows what happens when the gain crosses into the higher band:

• Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £52,600 (gov.uk).
• For the 2026 to 2027 tax year the allowance is £3,000, which leaves £49,600 to pay tax on (gov.uk).
• Because the combined amount of £69,600 is more than £37,700 (the basic rate band for the 2026 to 2027 tax year), you will pay Capital Gains Tax at 18% on £17,700 and then 24% on £31,900 (gov.uk).
• This means you will pay £10,842 (gov.uk).

Residential property reporting

Residential-property disposals sit under a separate reporting route. If you sold a UK residential property and you have tax on gains to pay, you can report and pay using a Capital Gains Tax on UK property account (gov.uk).

A note on scope

This page covers the published HMRC rules: the £3,000 Annual Exempt Amount (gov.uk), the £1,500 trusts allowance (gov.uk), the 18% basic-band rate from 6 April 2026 (gov.uk), the 24% higher-band rate from 6 April 2026 (gov.uk), and the residential-property reporting route (gov.uk).

UK Calculator provides information and tools, not regulated tax advice. Anyone with a meaningful disposal should consult a chartered tax adviser or accountant, particularly for reliefs and spousal-transfer treatment.

Frequently asked questions

How much is the CGT tax-free allowance for 2026/27?

The Capital Gains tax-free allowance is: £3,000 (gov.uk).

What CGT rate does a higher-rate taxpayer pay?

If you're a higher or additional rate taxpayer, you'll pay 24% on your gains from 6 April 2026 (gov.uk).

What rate does a basic-rate taxpayer pay?

Either 18% if the gain fits inside the basic Income Tax band (gov.uk) or 24% for any amount above the basic Income Tax band (gov.uk).

Do I pay CGT if my gains are under the allowance?

No. You also do not have to pay Capital Gains Tax if all your gains in a year are under your tax-free allowance (gov.uk).

What counts as a disposal for CGT?

Disposing of an asset includes: selling it, giving it away as a gift, or transferring it to someone else, swapping it for something else, getting compensation for it (gov.uk).

How do I report a CGT gain on a residential property?

If you sold a UK residential property and you have tax on gains to pay, you can report and pay using a Capital Gains Tax on UK property account (gov.uk).