Capital gains tax in the UK has had a busy few years. Rates were overhauled in the October 2024 Budget, the Business Asset Disposal Relief rate has been stepping upwards in stages, and reporting deadlines for property have tightened considerably. If you’re planning to sell a business, an investment property, or shares, the version of CGT you last looked up could easily be out of date.

We work with a lot of property investors, business owners, and people approaching an exit — and the question we hear most often is not “what rate do I pay?” but “how do I make sure I’m not paying more than I need to?” That requires understanding the rules as they stand today, not as they were three years ago. This post sets out the current position for 2026/27 and flags the most important planning points.

As of 6 April 2026, the main rates of capital gains tax in the UK for non-residential assets are 18% for gains that fall within the basic rate band, and 24% for gains above it. These rates have been aligned with property rates since the 2024 Budget — previously, non-property gains attracted lower rates of 10% and 20%.

The basic rate band for income tax purposes sits at £37,700 for 2026/27. To work out which rate applies to your gain, you need to stack it on top of your taxable income for the year. If the combined total stays within the basic rate band, you pay 18%. Anything above pays 24%. Most higher earners will find their entire gain lands in the 24% bracket.

The annual exempt amount — the slice of gains you can make each year without paying tax — remains at £3,000. That figure has fallen sharply from £12,300 just a few years ago, which means more people now have a CGT liability on disposals that would previously have been covered entirely by the exemption. Trustees have a lower exempt amount of £1,500.

One change worth noting: from 6 April 2026, carried interest (relevant mainly to private equity fund managers) has moved out of CGT entirely and is now taxed as income. That’s a narrow technical change, but it illustrates the direction of travel — gains are increasingly being taxed closer to income rates.

If you’re selling a qualifying business — or your shares in a trading company — Business Asset Disposal Relief (BADR) can reduce your CGT rate significantly. But the relief has been getting less generous, and it’s worth understanding where it now stands.

For disposals on or after 6 April 2026, the BADR rate is 18%. It was 14% for disposals made between 6 April 2025 and 5 April 2026, and 10% before that. The lifetime limit on qualifying gains remains at £1 million per individual — it has not changed.

The practical implication is that if you were considering an exit and wondering whether to accelerate or delay, the rate has now settled at 18% rather than continuing to rise further (at least for now). That said, 18% is still materially lower than the 24% main rate — so for a qualifying sale, BADR remains a significant relief worth preserving.

To qualify for BADR, you generally need to have been an officer or employee of the company for at least two years, and to have held at least 5% of the ordinary shares and voting rights throughout that period. These conditions catch people out more often than you’d expect — particularly where share structures have changed, or where the two-year clock was not started early enough.

If you’re approaching an exit, it’s worth reviewing eligibility well in advance rather than assuming the relief will apply.

Property is where we see the most CGT surprises in practice — particularly the reporting deadline, which catches a lot of people off guard.

When you sell a residential property in the UK and a CGT liability arises, you must report the gain and pay the tax within 60 days of completion. This is separate from your Self Assessment return — it’s a standalone report filed through HMRC’s property disposal service. Miss the deadline and penalties start immediately, even if you file your tax return on time in January.

Calculating the gain itself is usually straightforward: sale proceeds minus what you originally paid, minus allowable costs. Those allowable costs include solicitors’ and estate agents’ fees on both purchase and sale, and any capital improvement costs — an extension, a loft conversion, a new kitchen. Routine maintenance and repairs don’t count.

There are a few situations where market value is used instead of the actual price. If the property was inherited, gifted, sold at below market value, or acquired before April 1982, HMRC requires you to use the open market value at the relevant date. Getting this wrong — using the purchase price when market value should apply, or vice versa — is one of the more common errors we see.

Private Residence Relief (PRR) shelters gains on your main home from CGT. The final nine months of ownership are always treated as qualifying occupation, even if you were not living there — this extends to 36 months if the owner has moved into a care home. For capital gains tax on property in more complex situations — holiday lets, mixed-use properties, periods of letting — the interaction between PRR and other reliefs can become complicated quickly.

CGT planning is not about loopholes — it’s about making sensible use of the reliefs and allowances that already exist. A few that come up regularly in our conversations with clients:

• Use the annual exempt amount each year. The £3,000 allowance cannot be carried forward. If you hold assets with unrealised gains, there may be value in crystallising some gains each tax year rather than allowing them to accumulate.
• Spousal transfers. Transfers between spouses and civil partners take place at no gain and no loss. If one of you is a basic rate taxpayer and the other pays higher rate, transferring an asset before disposal can mean the gain is taxed at 18% rather than 24%.
• Losses. Capital losses reduce your taxable gains. Losses from the current tax year must be used before the annual exempt amount — you cannot choose to carry them forward to save them for a larger gain. Losses from earlier years can be carried forward indefinitely and set against future gains.
• Timing. If you’re close to the basic/higher rate boundary, the tax year in which you complete a disposal matters. Delaying or accelerating by a few weeks can sometimes change the effective rate you pay.
• Business structuring. For property investors holding assets through a limited company, the tax position is fundamentally different — corporation tax applies to gains rather than CGT, and extraction of proceeds involves additional layers. Neither structure is universally better; it depends entirely on your circumstances.