Capital Gains Tax UK 2026 — £3,000 Allowance and the Hard Lessons
The UK Capital Gains Tax annual exempt amount has been cut hard. From £12,300 in 2022–23 to £3,000 in 2024–25 and 2025–26. Investors are paying CGT on far smaller portfolios than they used to. Here’s the 2026 picture.
CGT Rates in 2026
- Lower rate (within basic-rate band): 18% on property, 10% on other assets (shares, crypto, etc.)
- Higher rate (within higher-rate band): 24% on property, 20% on other assets
Note: rates on residential property gains are higher (you sell your buy-to-let and pay 24%, not 20%).
The Worked Example
You bought £30,000 of stocks five years ago. Now they’re worth £50,000. You sell and realize the £20,000 gain.
- Annual CGT allowance: £3,000
- Taxable gain: £17,000
If you’re a higher-rate taxpayer:
- CGT due: £17,000 × 20% = £3,400
In 2023 with the £12,300 allowance, the same sale would have produced only £7,700 in taxable gain, costing £1,540 in CGT. The 2024–26 reform more than doubled this tax bill.
How to Manage the Allowance
1. Sell across tax years. The £3,000 allowance refreshes April 6 each year. If you can split a planned sale across two tax years (sell £25k of gains in March, £25k in April), you use two allowances.
2. Use your spouse’s allowance. Spouses can gift each other assets free of CGT. You can transfer shares to your spouse before selling, doubling your effective allowance to £6,000.
3. Bed and ISA / Bed and SIPP. Sell from your General Investment Account (using the £3,000 allowance), then rebuy inside your ISA. Future growth is now CGT-free.
4. Bed and Spouse. Sell, have your spouse rebuy. Effectively crystallises your gains while keeping the position. Requires legitimate intent — HMRC scrutiny exists for repeated washes.
5. Carry losses forward. If you have realised losses (failed investments), you can carry them forward indefinitely to offset future gains. Always report losses on self-assessment in the year they occur — losses unreported within 4 years are lost.
Reporting and Payment
For 2026:
- If your total gains exceed the £3,000 allowance, you must report on self-assessment
- Capital gains on UK residential property must be reported via the UK Property Account within 60 days of completion, with payment due then
- Other gains are reported in the normal self-assessment timeline (by 31 January following the tax year)
CGT on Crypto
Crypto is treated as a chargeable asset. Every disposal — sale, swap to another crypto, payment for goods — is a CGT event. Detailed records are required. HMRC accepts pooling methods compliant with the share-pooling rules.
CGT-Free Assets
- ISA-held assets (any growth is exempt)
- Pension-held assets
- Your primary residence (subject to lettings/use rules)
- Gilts
- Premium bonds (winnings are tax-free, not gains)
- Personal items under £6,000
The Long-Hold Mindset Returns
In 2024–26 with a £3,000 allowance, frequent small profit-taking outside an ISA becomes tax-inefficient. The new mindset for UK investors: buy and hold inside ISA and pension wrappers; use the GIA only for assets you genuinely don’t expect to grow significantly.
Bottom Line
The £3,000 CGT allowance is small enough that any meaningful gain outside ISA/pension triggers tax. Prioritize ISA every tax year (£20,000), use spousal transfers and bed-and-ISA strategies, and report losses immediately so they’re available to offset future gains.