How to Reduce Capital Gains Tax in the UK (2026/27)
Capital Gains Tax (CGT) is the tax on the profit when you sell assets for more than you paid. This guide covers the 2026/27 rates and 9 legitimate ways to reduce your bill.
What is Capital Gains Tax and who pays it?
You pay CGT on the profit (not the total sale price) when you sell or give away an asset that has increased in value. It applies to:
- Selling a second home or rental property (your main home is usually exempt)
- Selling shares outside an ISA
- Disposing of cryptocurrency – including crypto-to-crypto trades
- Valuables such as jewellery or art worth over £6,000
You only pay CGT on gains above your £3,000 annual exempt amount – so most people with modest gains pay nothing.
Capital Gains Tax rates 2026/27
| Taxpayer | Rate on all gains |
|---|---|
| Basic-rate taxpayer | 18% |
| Higher / additional-rate taxpayer | 24% |
| Business Asset Disposal Relief | 18% on up to £1m of lifetime gains |
From 6 April 2026 the rates on residential property and other assets are unified – everyone pays 18% or 24% depending on their Income Tax band. The old 10%/20% rates for shares and crypto no longer apply.
The annual exempt amount is £3,000 per person for 2026/27, frozen until 2030. It cannot be carried forward – use it or lose it every tax year. The basic rate band is £37,700, which decides whether your gain is taxed at 18% or 24%.
9 ways to reduce your Capital Gains Tax bill
- Use your £3,000 annual exemption every year – sell or gift assets to realise gains within the allowance before they grow larger.
- Invest through an ISA – gains inside an ISA are completely free of CGT and income tax. Use your £20,000 ISA allowance.
- Offset losses against gains – declare losing sales; they reduce your taxable gains. Losses can be carried forward.
- Transfer assets to your spouse or civil partner – transfers between spouses are CGT-free and double your exemptions.
- Claim Private Residence Relief (PRR) – your main home is exempt from CGT, including the last 9 months of ownership if you moved out.
- Time your sales – split sales across tax years to use the £3,000 exemption twice.
- Use Business Asset Disposal Relief – selling a business or qualifying shares can cut the rate to 18% (2026/27) on up to £1m of gains.
- Gift to charity – assets gifted to UK charities are exempt from CGT.
- Pension contributions – higher pension relief can reduce your income tax band, which lowers the CGT rate you pay.
Worked example
You sell shares outside an ISA for a £10,000 profit in 2026/27. Your £3,000 exemption leaves £7,000 taxable. As a higher-rate taxpayer you pay 24% × £7,000 = £1,680. Selling half the shares this year and half next year would cut the bill to £960 by using the exemption twice.
Rates can change
CGT rules changed from 6 April 2026, with unified 18%/24% rates and Business Asset Disposal Relief at 18%. Always check gov.uk for the current tax year before acting.
Capital Gains Tax FAQs
What are the Capital Gains Tax rates in 2026/27?
From 6 April 2026 the rates are unified: 18% for basic-rate taxpayers and 24% for higher-rate taxpayers, on all assets including residential property, shares and crypto. Everyone has a £3,000 annual exempt amount.
How can I avoid paying Capital Gains Tax legally?
Use the £3,000 annual exemption each year, hold investments in an ISA, offset losses, transfer assets to a spouse, and claim reliefs like Private Residence Relief or Business Asset Disposal Relief.
Do I pay Capital Gains Tax on my main home?
No – selling your only or main home is normally exempt under Private Residence Relief if you lived in it throughout ownership and the grounds are under 5,000 square metres.
What is the annual exempt amount for 2026/27?
£3,000 per person, frozen until 2030. It cannot be carried forward – use it or lose it each tax year.
Related: Inheritance tax gifts: 7-year rule explained · Self Assessment guide · Tools: IHT Gift Calculator · NI Calculator