Capital Gains Tax Rates UK 2026/27: Current Rates and Annual Exemption

What are the capital gains tax rates for 2026/27?

Residential property is taxed at 18% on gains within the basic-rate band and 24% on gains above it. These rates apply to second homes, buy-to-let properties, and any residential property that is not the seller's main home.

The rate that applies depends on total taxable income plus the gain. If the seller's income is below the higher-rate threshold of £50,270, any part of the gain that fits within the remaining basic-rate band is taxed at 18%. The rest is taxed at 24%.

What is the annual exempt amount?

The annual exempt amount for 2026/27 is £3,000 per person. This is the portion of total capital gains in a tax year that is not charged to tax. It cannot be carried forward; an unused allowance is lost at the end of the year.

Joint owners each get their own allowance. A couple selling a jointly owned property can shelter £6,000 of the gain between them.

How have CGT rates and allowances changed?

The rates themselves rose in late 2024, and the annual exempt amount has been cut three times since 2022. The table below tracks both changes.

The net effect is mixed. The higher rate dropped from 28% to 24%, reducing the tax on each pound of gain. But the annual exempt amount fell by £9,300, which adds roughly £2,232 to the bill on any gain large enough to exceed the old allowance. For gains under about £40,000, sellers pay more now than they did in 2022/23 despite the lower rate.

How does the basic-rate band affect the tax?

The basic-rate band determines how much of the gain is taxed at the lower rate. In 2026/27 the band runs from the personal allowance of £12,570 to the higher-rate threshold of £50,270.

Income is counted first. If a seller earns £30,000, the remaining basic-rate band is £20,270. Any gain that fits inside that space is taxed at 18%; the rest at 24%.

Someone who already earns above £50,270 has no remaining band, so the entire gain is charged at 24%. This is the position most property sellers with full-time employment find themselves in.

Who has to pay capital gains tax on property?

Anyone who sells a residential property that is not their main home and makes a gain above the annual exempt amount. This includes second homes, buy-to-let properties, inherited properties (where the gain is measured from the probate value), and holiday homes.

Sales of a main home are usually exempt under Private Residence Relief. If the property was the seller's only or main residence for the entire period of ownership, no CGT is due.

Non-residents who sell UK property are also liable, at the same rates, and must report within 60 days whether or not any tax is payable.

When must the tax be reported and paid?

Within 60 days of completion. This is done through an HM Revenue and Customs Capital Gains Tax on UK property account, which is separate from Self Assessment.

The 60-day deadline is the point that catches most people. The tax is due months before the annual Self Assessment return, and the penalty for late filing is a fixed amount plus interest. Setting the money aside at completion rather than after is the practical approach.

UK residents do not need to file the 60-day return if the gain is fully covered by the annual exempt amount or Private Residence Relief. Non-residents must file regardless.