Understanding capital gains tax has never been more important for UK business owners, property investors, and anyone considering selling a significant asset. The rates shifted in October 2024, shifted again in April 2025, and shifted once more in April 2026 — and the reliefs that many people were counting on have changed shape along with them.

We speak to clients regularly who are working from outdated assumptions: either they expect the old 10% Business Asset Disposal Relief rate, or they assume the annual exempt amount is still worth planning around at its former level. Neither of those positions holds now, and the gap between expectation and reality is where unexpected tax bills tend to appear.

This post gives you an honest picture of where CGT stands in 2026, what the changes mean in practice, and a few considerations worth thinking through before you sell anything significant.

For most assets — shares, business assets, personal possessions above the relevant threshold — the main CGT rates from 6 April 2026 are 18% for gains that fall within the basic rate band and 24% for gains that push you into the higher rate band. These replaced the old 10% and 20% rates that applied before October 2024.

Residential property was already taxed at 18% and 24%, so those rates remain unchanged — the shift in October 2024 effectively brought other asset classes up to match property rather than cutting property tax.

Trustees and personal representatives pay a flat 24% rate, also from 6 April 2026.

To work out which rate applies to you, the calculation stacks your taxable income against the basic rate band (£37,700 for 2026-27). Any unused basic rate band available after income is set against gains first, with the balance taxed at the higher rate. It sounds straightforward, and for many people it is — but the interaction with salary, dividends, or rental income can shift the picture considerably, which is why we always recommend modelling this before completing a sale rather than after.

The CGT annual exempt amount for 2026-27 is £3,000. That is not a typo. It was £12,300 as recently as 2022-23, cut to £6,000 in 2023-24, then halved again to £3,000 in 2024-25 — where it has since remained.

In practical terms, this means the exempt amount is now small enough that many disposals which would previously have attracted no CGT at all now generate a liability. A basic-rate taxpayer selling shares with a gain of £10,000 would face tax on £7,000 of that gain — a charge of £1,260 at 18% — where three years ago the entire gain would have been sheltered.

For business owners who have accumulated shares, investment assets, or property over time, this reduction makes planning far more relevant. Spreading disposals across tax years, using a spouse or civil partner’s exempt amount, or considering ISA wrappers for investable assets are all worth reviewing — but the window to act is never the point of sale itself. Once you have exchanged contracts on a property or sold shares, the planning options narrow considerably.

This is particularly relevant for clients we work with who hold property portfolios or have built up shareholdings in their own companies. The annual exempt amount is no longer a meaningful buffer on its own.

Business Asset Disposal Relief (BADR) — previously known as Entrepreneurs’ Relief — allows qualifying business owners to pay a reduced rate of CGT when they sell all or part of a trading business, shares in a personal company, or certain other qualifying assets.

The relief is still available, with a lifetime limit of £1 million of qualifying gains. But the rate has increased significantly. It stood at 10% before October 2024, rose to 14% from 6 April 2025, and increased again to 18% from 6 April 2026.

At 18%, BADR still offers a saving compared to the 24% higher rate that would otherwise apply — but the margin is narrower than it used to be. For a £500,000 gain, the difference between BADR at 18% and the standard higher rate of 24% is £30,000, which is still very meaningful. The relief remains worth claiming where it is available.

What we see in practice is that some owners who were close to retirement or considering a sale have accelerated their timeline, and others are restructuring their businesses in advance of a disposal to ensure they qualify. BADR has strict conditions around trading status, the percentage of shares held, and how long those shares have been owned — so this is an area where getting advice well before the disposal is essential, not optional.

With the annual exempt amount at £3,000 and rates at their current levels, the timing of a disposal matters more than it used to. A few considerations worth raising before you proceed:

• Tax year-end planning: If you have two assets to sell, consider whether splitting the disposals across 5 April gives you access to two years’ worth of exempt amounts. On larger gains this rarely transforms the position, but on modest gains it can make a material difference.
• Your income in the year of disposal: If you are expecting a lower-income year — perhaps you are winding down, taking a career break, or your business profits are lower — completing a disposal in that year may mean more of your gain falls within the basic rate band and is taxed at 18% rather than 24%.
• Use of spouse or civil partner allowances: Transfers between spouses are exempt from CGT, which means an asset can be transferred to a spouse before sale, allowing each party to use their annual exempt amount and potentially their own basic rate band against the gain.
• BADR eligibility check: If you are selling a business or company shares, check BADR eligibility early. The conditions are specific and some cannot be created retroactively.

None of this is about avoiding tax — it is about not paying more than the law requires through poor timing or a lack of planning.