Tax

Capital Gains Tax in the UK: A Complete Guide for 2026/27

SYM

Capital Gains Tax (CGT) is charged on the profit you make when selling or disposing of an asset that has increased in value. This includes shares, investment funds, second properties, valuable possessions worth over £6,000, and business assets. With the annual exempt amount now reduced to just £3,000, more people than ever are being caught by CGT. Understanding how it works — and the legitimate strategies to reduce it — is essential for anyone building wealth in the UK.

CGT Rates and the Annual Exempt Amount

In 2026/27, the annual exempt amount for CGT is £3,000 — down from £12,300 just a few years ago. This means the first £3,000 of gains in each tax year is tax-free, but everything above that is taxed. The rates depend on your income tax band: basic-rate taxpayers pay 10% on gains from most assets and 18% on residential property gains. Higher and additional-rate taxpayers pay 20% on most assets and 24% on residential property. These rates apply after your Personal Allowance and basic-rate band are used up.
  • •Annual exempt amount: £3,000 (2026/27)
  • •Basic rate: 10% on most assets, 18% on property
  • •Higher rate: 20% on most assets, 24% on property
  • •Your main residence is exempt (Principal Private Residence Relief)
  • •ISA and pension gains are completely exempt from CGT
Do I pay CGT on selling my home?+

No — your main residence is exempt under Private Residence Relief. CGT only applies to second homes, buy-to-let properties, and homes you don't live in as your primary residence.

When CGT Applies

CGT is triggered when you sell, gift (unless to spouse/civil partner), exchange, or receive compensation for an asset. Common scenarios include selling shares or funds outside an ISA, selling a second property, selling cryptocurrency, selling a business, and selling valuable items like art or jewellery worth over £6,000. Important: CGT is charged on the gain (profit), not the total sale price. If you bought shares for £10,000 and sold for £15,000, your gain is £5,000 — and only £2,000 of that is taxable after the exempt amount.
  • •Selling shares or funds outside an ISA
  • •Selling a second property or buy-to-let
  • •Selling cryptocurrency
  • •Gifting assets (except to spouse/civil partner)
  • •Selling valuable possessions worth over £6,000
  • •Transfers between spouses/civil partners are CGT-free

Strategies to Minimise CGT

The most powerful CGT strategy is using your ISA allowance — all gains within ISAs are completely exempt. For investments outside ISAs, use your annual exempt amount every year by 'bed and ISA-ing': sell investments to realise gains up to £3,000, then immediately repurchase within your ISA. Transfers between spouses are CGT-free, so a couple can effectively double their exempt amount to £6,000. Time your disposals across tax years to use multiple years' exemptions. For property, Private Letting Relief and Principal Private Residence Relief can significantly reduce CGT on former homes.
  • •Use your ISA allowance — all gains are CGT-free
  • •Bed and ISA: sell and rebuy within your ISA to crystallise gains tax-free
  • •Transfer assets to spouse before selling to use both exempt amounts
  • •Spread disposals across multiple tax years
  • •Deduct allowable costs: buying fees, selling fees, improvement costs
  • •Offset losses against gains — carry forward unused losses indefinitely
What is 'bed and ISA'?+

You sell investments in your general account (realising a gain within your exempt amount), then buy the same investments back inside your ISA. This 'moves' your investments into a tax-free wrapper. The gain crystallised is covered by your £3,000 exemption.

Reporting and Paying CGT

For property disposals, you must report and pay CGT within 60 days of completion using the HMRC 'Report and pay Capital Gains Tax on UK property' service. For other assets, gains are reported through your Self Assessment tax return. If you don't normally file a tax return, you'll need to register for Self Assessment if your gains exceed the exempt amount. Keep detailed records of purchase prices, dates, costs, and sale proceeds — HMRC can ask for these years later. Track your investment performance in SYM to stay on top of potential CGT liabilities.
  • •Property CGT: report and pay within 60 days of completion
  • •Other assets: report via Self Assessment tax return
  • •Register for Self Assessment if gains exceed £3,000
  • •Keep records of all purchase and sale prices
  • •Include allowable costs to reduce your taxable gain
  • •Track investment gains in SYM to plan disposals
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