Capital Gains Tax: the annual exempt amount and rates for 2026-27
Capital Gains Tax is charged on the gain from disposing of an asset, not the sale price. For the 2026-27 tax year the annual exempt amount is £3,000 and the main rates are 18% and 24%.
On this page
- Tax year
- 6 April 2026 to 5 April 2027.
- Annual exempt amount (individuals)
- £3,000. Gains below this are not subject to CGT.
- Annual exempt amount (other trustees)
- £1,500.
- Main CGT rates for individuals
- 18% on the portion of gains within the basic-rate band; 24% on gains above the basic-rate band.
- Rate for Business Asset Disposal Relief
- 18% on qualifying gains disposed of from 6 April 2026.
The annual exempt amount is consumed first, before the rates apply
Capital Gains Tax is charged on the gain made when disposing of an asset, not the full amount received. Each tax year an individual gets an annual exempt amount of £3,000 that is set by Parliament. Gains up to £3,000 are not subject to CGT; only the gain above that amount is taxed. The annual exempt amount is withdrawn first, before the CGT rates are applied to the remainder. GOV.UK, Capital Gains Tax rates and allowances (opens in a new tab).
A gain of exactly £3,000 in a tax year is not taxed. A gain of £3,001 is taxed on £1 at the applicable rate. The annual exempt amount cannot be carried forward to a later tax year; it is reset each year.
The CGT rates depend on total taxable income, not on the gain itself
The Capital Gains Tax rates for individuals are 18% and 24%, and which rate applies depends on taxable income and the size of the gain: the part of the gain that, added to taxable income, falls within the basic-rate band is taxed at 18%, and any amount above it at 24%. GOV.UK, Capital Gains Tax rates (opens in a new tab).
This means CGT is worked out after Income Tax for the year is established, not independently of it. Taxable income and gains use the same band boundaries: the basic-rate band is the same for both. For Scottish taxpayers, CGT uses the UK basic-rate band, not the Scottish Income Tax bands. The order is: deduct the Personal Allowance from total income, apply Income Tax rates to the remainder, then apply CGT rates to gains after subtracting the annual exempt amount. GOV.UK, HMRC internal manuals: capital gains manual cg21204 (opens in a new tab).
Business Asset Disposal Relief (formerly Entrepreneurs' Relief) is charged at 18% on qualifying gains from 6 April 2026, the same as the main lower rate, so it only reduces tax on gains that would otherwise be charged at 24%. Investors' Relief on qualifying shares has the same rate. Both are exceptions to the main two-rate structure and have their own conditions for eligibility. GOV.UK, Business Asset Disposal Relief (opens in a new tab).
Trustees and personal representatives have different rules
Trustees (other than trustees for disabled people) receive a lower annual exempt amount of £1,500 for the 2026-27 tax year, and gains they make are charged at 24%. Personal representatives of a deceased person's estate pay 24% and get the annual exempt amount for the tax year of death and the following 2 tax years; after that, no annual exempt amount applies during the administration period. GOV.UK, Capital Gains Tax rates and allowances (opens in a new tab).
This page is an original explanation based on HMRC and GOV.UK pages under the Open Government Licence v3.0; the wording has been adapted and HMRC does not endorse this website. This page does not cover the precise rules for Business Asset Disposal Relief, Investors' Relief, the non-resident CGT regime, overseas Workday Relief or the foreign income and gains regime.