Capital Gains Tax New Rates and Changes Explained for 2026/27

Capital Gains Tax new rates have changed significantly in recent years, affecting individuals, investors, property owners and business owners who dispose of assets that have increased in value. Understanding the latest rules is essential because the rate of tax you pay depends on the type of asset sold, your taxable income and whether any reliefs apply. Following changes announced in the Autumn Budget 2024, several important Capital Gains Tax changes were introduced, including increases to the main CGT rates for many assets and future changes to Business Asset Disposal Relief. These updates mean taxpayers should review their position carefully before selling property, investments or business assets. For the 2026/27 tax year, the UK Capital Gains Tax rates remain 18% and 24% for most individuals, while qualifying business disposals may benefit from a reduced rate under Business Asset Disposal Relief. CGT operates alongside the wider Income Tax rules explained in our ultimate guide to personal tax in the UK, since taxable income determines which CGT rate applies. The annual tax-free allowance remains £3,000 for individuals, meaning careful planning is increasingly important when realising capital gains. This guide explains the latest CGT rate changes, how they apply, what reliefs are available and how individuals can prepare for the current Capital Gains Tax rules.

What Are the New Capital Gains Tax Rates?

The latest Capital Gains Tax updates introduced changes to the rates applying to many asset disposals from 30 October 2024. Before these changes, gains from most assets other than residential property were generally taxed at lower rates of 10% and 20%. The Autumn Budget 2024 increased these rates so that they now align with residential property CGT rates. The current CGT rates for individuals are:

Type of Gain	Basic Rate Taxpayer	Higher or Additional Rate Taxpayer
Residential property	18%	24%
Shares and other taxable assets	18%	24%
Qualifying Business Asset Disposal Relief gains	18%	18%

Your taxable income affects which CGT rate applies. Capital gains are added on top of your income for the tax year, meaning some of your gain may fall within your unused basic-rate band while the remainder may be taxed at the higher CGT rate.

Capital Gains Tax Changes Since October 2024

The main Capital Gains Tax changes introduced from 30 October 2024 affected the standard CGT rates applying to assets such as shares and investments. The changes included:

• The lower CGT rate for most non-property assets increased from 10% to 18%.
• The higher CGT rate for most non-property assets increased from 20% to 24%.
• The CGT rates for residential property remained unchanged at 18% and 24%.
• The rates for trustees and personal representatives increased to 24% for relevant disposals.

These changes mean there is now greater consistency between the tax treatment of property gains and gains from many investments. However, the tax outcome still depends on the asset being sold and the individual circumstances of the taxpayer.

UK Capital Gains Tax Rates for 2026/27

For a full breakdown of current rates and allowances across every asset type, our companion guide sets out the complete picture in one place. The UK Capital Gains Tax rates for 2026/27 apply as follows:

Residential Property

Residential property gains, including gains from buy-to-let properties and second homes, continue to be taxed at:

• 18% where the gain falls within your unused basic-rate Income Tax band.
• 24% where the gain falls above your basic-rate band.

Your main home is normally exempt from Capital Gains Tax through Private Residence Relief, although partial charges may apply in certain circumstances.

Shares and Investments

Shares, investment funds and other taxable investments held outside tax-efficient accounts are generally subject to:

• 18% CGT for basic-rate taxpayers.
• 24% CGT for higher and additional-rate taxpayers.

Investments held within an ISA are generally protected from Capital Gains Tax, making tax-efficient investment planning an important consideration for long-term investors.

Capital Gains Tax Allowance Explained

The Capital Gains Tax Annual Exempt Amount allows individuals to realise a certain amount of gains each tax year without paying CGT. For 2026/27, the allowance remains:

• £3,000 for individuals.
• £1,500 for most trustees.

The allowance applies to your total capital gains during the tax year rather than separately to each asset. For example, if you sell shares and a second property during the same tax year, both gains are combined when determining whether your Annual Exempt Amount has been used. The allowance cannot be carried forward if unused. This means taxpayers who regularly dispose of assets should consider the timing of transactions carefully.

Why the Reduced CGT Allowance Matters

The reduction in the Annual Exempt Amount has increased the importance of effective CGT planning. Previously, individuals could realise larger gains before any tax became payable. With the allowance now reduced to £3,000, more taxpayers may find that asset disposals create a reporting requirement or a CGT liability. The reduced allowance particularly affects:

• Investors selling shares outside an ISA.
• Landlords disposing of buy-to-let properties.
• Individuals selling valuable assets.
• Business owners planning an exit.

Reviewing your position before disposing of assets allows you to consider available exemptions, losses and reliefs before a transaction becomes final.

Capital Gains Tax on Property After the Rate Changes

Property remains one of the most common areas where taxpayers encounter Capital Gains Tax. CGT may apply when selling:

• Buy-to-let properties.
• Second homes.
• Inherited properties.
• Holiday homes.
• Land held as an investment.

The taxable gain is generally calculated by deducting the original purchase cost and allowable expenses from the selling price. Allowable costs may include:

• Stamp Duty Land Tax paid when purchasing the property.
• Legal fees connected with purchase and sale.
• Estate agent fees.
• Qualifying capital improvements.

Routine repairs and maintenance are generally not included when calculating the capital gain because they are dealt with separately under property income rules.

Private Residence Relief and Capital Gains Tax

Private Residence Relief (PRR) remains one of the most valuable exemptions when considering Capital Gains Tax new rates on residential property. If a property has been your only or main residence throughout the ownership period, any gain made on disposal will normally be exempt from Capital Gains Tax. However, PRR may only cover part of the gain where:

• The property was rented out for a period of ownership.
• The property was used partly for business purposes.
• You owned more than one home and cannot demonstrate which was your main residence.
• The property was not occupied as your genuine main home.

Where only part of the ownership period qualifies for relief, the taxable gain is calculated by separating the exempt period from the non-qualifying period. Landlords who previously lived in a property before converting it into a rental investment should review whether Private Residence Relief can reduce their Capital Gains Tax liability before selling.

Business Asset Disposal Relief Changes

Business Asset Disposal Relief (BADR) is one of the key areas affected by recent CGT rate changes. BADR allows qualifying business owners to pay Capital Gains Tax at a reduced rate when disposing of certain business assets. The rate changes are:

• 10% for qualifying disposals before 6 April 2025.
• 14% for qualifying disposals from 6 April 2025.
• 18% for qualifying disposals from 6 April 2026.

The lifetime limit remains £1 million of qualifying gains. To qualify for BADR, individuals generally need to meet specific conditions, including:

• Owning the business or qualifying shares for the required period.
• Meeting minimum shareholding requirements where applicable.
• Being involved in the business as an officer or employee.
• Disposing of qualifying business assets.

Because BADR conditions are detailed, business owners planning an exit should review their position well before completing a disposal.

Capital Gains Tax on Shares and Investments

The recent Capital Gains Tax updates also affect investors disposing of shares and other taxable investments. A closer look at what happens when you sell shares specifically can help clarify how the calculation differs from a property disposal. Investments held outside tax-efficient accounts may create a taxable gain when sold. Examples include:

• Company shares.
• Investment funds.
• Exchange-traded funds.
• Cryptocurrency assets.
• Other financial investments.

The taxable gain is normally calculated by deducting the original purchase cost and allowable transaction expenses from the sale proceeds. Investors should maintain records of:

• Purchase dates.
• Purchase prices.
• Broker charges.
• Sale proceeds.
• Previous capital losses.

Accurate records help ensure that taxpayers claim all available deductions and avoid paying more CGT than necessary.

Strategies to Manage Capital Gains Tax Liability

Although Capital Gains Tax cannot always be avoided, effective planning can help taxpayers manage their liability. Common strategies include:

Use the Annual Exempt Amount

The Capital Gains Tax allowance is available each tax year but cannot be carried forward. Where appropriate, spreading disposals across different tax years may allow individuals to use more than one annual exemption.

Transfer Assets Between Spouses or Civil Partners

Transfers between spouses and civil partners can generally take place on a no-gain, no-loss basis where the relevant conditions are met. This may allow couples to make better use of both individuals’ allowances, tax bands and available reliefs.

Use Capital Losses

Capital losses from other disposals may reduce taxable gains. Taxpayers should review whether previously realised losses are available before calculating their final CGT liability.

Consider ISA Investments

Investments held within an ISA are generally exempt from Capital Gains Tax. Using tax-efficient investment structures can help protect future investment growth.

Review Disposal Timing

The timing of a sale can affect the tax outcome. Completing disposals in different tax years may help manage the amount of gains realised and improve the use of available allowances.

Example: How the New CGT Rates Affect Taxpayers

James sells a buy-to-let property during the 2026/27 tax year. The figures are:

• Sale price: £450,000.
• Original purchase price: £280,000.
• Allowable purchase and improvement costs: £35,000.
• Sale costs: £5,000.

The calculation is:

• Sale proceeds: £450,000.
• Less purchase and allowable costs: £320,000.
• Capital gain: £130,000.
• Less Annual Exempt Amount: £3,000.
• Taxable gain: £127,000.

The final CGT liability depends on James’s income position for the year and whether the gain falls within his unused basic-rate band. This example demonstrates why understanding the latest UK Capital Gains Tax rates is important before completing a property disposal.

Common Mistakes With New CGT Rules

Many taxpayers make avoidable errors because they are unaware of recent Capital Gains Tax changes. Common mistakes include:

• Using outdated CGT rates from previous tax years.
• Assuming the Annual Exempt Amount is still £12,300.
• Failing to report residential property gains within 60 days.
• Missing available reliefs.
• Not keeping evidence of improvement costs.
• Ignoring capital losses.
• Assuming all property sales qualify for Private Residence Relief.

Reviewing your position before selling an asset provides more opportunities to identify legitimate tax planning options.

How to Prepare for Capital Gains Tax Changes

With the reduction in allowances and changes to CGT rates, taxpayers should take a proactive approach when planning disposals. Useful steps include:

• Reviewing assets that may create future taxable gains.
• Maintaining complete purchase and improvement records.
• Understanding available reliefs before selling.
• Checking whether capital losses are available.
• Taking professional advice for complex transactions.

Key Takeaways

The latest Capital Gains Tax new rates have changed how many taxpayers approach asset disposals. The main CGT rates for 2026/27 remain 18% and 24%, while Business Asset Disposal Relief increases to 18% from April 2026. The reduction in the Capital Gains Tax allowance means more individuals may need to consider CGT planning when selling property, shares or business assets. Understanding the latest Capital Gains Tax updates, keeping accurate records and using available reliefs can help taxpayers manage liabilities while remaining compliant with HMRC rules.

Case Study: Preparing for the Impact of Changing Capital Gains Tax Rules

David visited our Wimbledon office after planning to sell a combination of investment assets and wanted to understand how the Capital Gains Tax new rates for 2026/27 could affect his overall tax liability. He was unsure how the updated CGT rates, reduced Annual Exempt Amount and available reliefs would apply to his circumstances before completing any disposals.

During the consultation, we reviewed David’s planned asset disposals, purchase records and previous investment history to estimate his potential Capital Gains Tax exposure. We explained how the UK Capital Gains Tax rates for 2026/27 apply to different assets, including residential property, shares and other taxable investments. We also reviewed how his Income Tax position could influence the rate payable, discussed the £3,000 Annual Exempt Amount, and identified planning opportunities such as using available capital losses, spreading disposals across tax years and considering tax-efficient investment structures.

Following the review, David gained a clearer understanding of the latest Capital Gains Tax changes, the allowances available and the steps required to manage his future disposals effectively. With appropriate planning before selling his assets, he was able to make informed decisions while ensuring his tax position remained accurate and compliant with HMRC requirements.