The Capital Gains Tax Annual Exempt Amount (AEA) is the tax-free profit you can make on UK asset sales each year. In 2026/27 it is £3,000 — slashed from £12,300 in 2022/23. Above this, gains are taxed at 18% (basic rate) or 24% (higher rate) on most assets, with 18%/24% on residential property too following 2024 reforms.
How the CGT allowance has been cut
| Tax year | Annual Exempt Amount |
|---|---|
| 2020/21 to 2022/23 | £12,300 |
| 2023/24 | £6,000 |
| 2024/25 onwards | £3,000 |
The cut from £12,300 to £3,000 over two years is the steepest UK tax-free allowance reduction of the decade. The Office of Budget Responsibility estimates an additional 260,000 UK taxpayers now owe CGT each year as a result.
Trusts and personal representatives get only £1,500 of AEA (half the personal amount).
CGT rates by asset type (2026/27)
| Asset type | Basic rate | Higher rate |
|---|---|---|
| Shares, funds, business assets | 18% | 24% |
| Residential property (second homes, BTL) | 18% | 24% |
| Carried interest | 18% | 24% |
| Crypto-assets | 18% | 24% |
| Main residence (Principal Private Residence) | Usually exempt | |
Note: from 30 October 2024, the rates on shares and most other assets were aligned with residential property at 18%/24%. Previously shares were 10%/20%, so this is a substantial increase that the 2024 Autumn Statement introduced.
How to use your £3,000 efficiently
- Spouse transfer. Married couples / civil partners can transfer assets to each other CGT-free. Doing so before selling means both £3,000 allowances can be used — £6,000 of gains tax-free in total.
- Bed-and-ISA / Bed-and-Spouse. Sell assets in a GIA up to your £3,000 gain, then rebuy them inside an ISA (£20,000/yr cap) or transferred to spouse. The 30-day "bed and breakfast" rule prevents you from rebuying the same asset in your own name immediately.
- Spread sales across tax years. A £10,000 gain split as £3,000 in March + £7,000 in April uses two annual allowances, saving CGT on £6,000 total at 24% = £1,440.
- Pension contribution to reduce CGT rate. Higher-rate CGT (24%) is reduced to basic-rate (18%) on gains that fall within the basic-rate band of your income. Pension contributions reduce taxable income, potentially shifting some gains into the basic-rate CGT band.
When do you actually pay CGT?
UK CGT is now reported within tight deadlines, especially for property:
- Residential property: file a UK Property CGT return within 60 days of completion and pay tax within 60 days.
- Other gains: declare via Self Assessment by 31 January following the tax year. Tax payable by the same date.
- If you have no other Self Assessment triggers and your gains are below £50,000, you can use HMRC's "real-time" CGT service to report and pay separately.
Calculate your CGT precisely
The CGT property calculator handles main residence relief, lettings, refurbishment costs and the 60-day reporting requirement.
Open the CGT property calculator →Sources and methodology
CGT rates and allowances from gov.uk/capital-gains-tax. Allowance cuts from Autumn Statement 2022 and 2024. Rate alignment from October 2024 Budget.
UK Tax Drag is not authorised by the Financial Conduct Authority and does not provide regulated financial advice — see the content disclaimer for the full position. The methodology page documents how every calculator is built and reviewed.
Related
- CGT property calculator — residential property gains with PPR relief
- Capital gains shares calculator — gains on shares, funds and ETFs
- UK Capital Gains Tax guide 2026/27 — full reference
- CGT spouse transfer tip — using both allowances
- Full UK money glossary
- FAQ library
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