The annual exempt amount for CGT is the amount of profit you can make from selling assets each tax year before any Capital Gains Tax is due. For 2026/27, that allowance remains frozen at £3,000 for most individuals, personal representatives, and trustees for disabled people, while most other trustees receive only £1,500. This guide sets out exactly how the annual exempt amount for CGT applies to your situation, how it interacts with current tax rates, and legitimate ways to make the most of it before 5 April.
In 2026/27 the annual exempt amount for CGT is £3,000 per individual, £3,000 for most personal representatives (but only for the tax year of death and the following two years), £3,000 for trustees acting for a disabled person, and £1,500 for most other trustees. The allowance cannot be carried forward and is lost if unused by the end of the tax year.
How the Annual Exempt Amount for CGT Has Changed
The annual exempt amount for CGT has fallen sharply over the past four tax years. It stood at £12,300 in 2021/22 and 2022/23, was cut to £6,000 in 2023/24, and has been frozen at £3,000 for individuals since 2024/25, a level confirmed again for 2026/27 by HMRC. This 76% reduction in just three years means thousands of ordinary investors, landlords, and retirees now have a Capital Gains Tax liability for the first time.
| Tax Year | Individuals, Personal Reps & Disabled Trusts | Other Trustees |
|---|---|---|
| 2026/27 | £3,000 | £1,500 |
| 2024/25 & 2025/26 | £3,000 | £1,500 |
| 2023/24 | £6,000 | £3,000 |
| 2021/22 & 2022/23 | £12,300 | £6,150 |
The allowance operates on a strict use-it-or-lose-it basis each tax year (6 April to 5 April) and cannot be carried forward, backdated, or transferred directly between spouses.
The Annual Exempt Amount for CGT by Entity Type
Individuals and Joint Owners
Every UK-resident individual receives their own £3,000 annual exempt amount for CGT in 2026/27. Jointly owned assets are split according to ownership share, so a married couple who own a rental property 50/50 can shelter up to £6,000 of combined gains before any tax is due.
Personal Representatives of a Deceased Estate
Executors and administrators are entitled to the full £3,000 allowance, but only for the tax year in which the death occurred and the following two tax years. After that period, the estate loses the annual exempt amount entirely on any further gains made during administration.
Trustees of a Settlement
Trustees acting for a disabled beneficiary receive the same £3,000 allowance as individuals. Most other trusts receive only £1,500 – half the individual rate – and where a settlor has created multiple trusts, that £1,500 must usually be divided between them, subject to a minimum of £300 per trust.
How the Allowance Interacts With 2026/27 Tax Rates
Once your gains exceed the annual exempt amount for CGT, the rate charged depends on who is disposing of the asset:
- Individuals: 18% within the basic rate band, 24% above the £50,270 higher rate threshold.
- Trustees: a flat 24% on all gains above the £1,500 (or £3,000) exemption – there is no basic rate band for trusts.
- Personal representatives: a flat 24% on estate gains above the £3,000 exemption.
- Business Asset Disposal Relief / Investors’ Relief: a reduced 18% rate on qualifying gains.
For a full breakdown of every band and relief, see our complete guide to Capital Gains Tax rates for 2026/27. If you are still establishing whether any tax is due at all, start with our guide on do I need to pay Capital Gains Tax.
Worked Example
An individual sells shares for a gain of £8,000 in 2026/27. After deducting the £3,000 annual exempt amount for CGT, £5,000 remains taxable. If their salary and other income keep them within the basic rate band, the full £5,000 is taxed at 18%, producing a bill of £900. Had the same £8,000 gain arisen inside a discretionary trust, only £1,500 would be exempt, leaving £6,500 taxable at the flat trustee rate of 24% – a bill of £1,560, despite the identical underlying gain.
Legitimate Ways to Maximise the Annual Exemption
Spousal Asset Pooling
Assets transferred between spouses or civil partners move on a no gain, no loss basis. Splitting ownership before a sale allows a couple to use two £3,000 allowances, sheltering £6,000 of gains rather than £3,000, and can shift part of the gain into a lower earner’s 18% band.
Bed and Spouse / Loss Harvesting
Selling assets to use your annual exempt amount for CGT before it is lost on 5 April, then having a spouse repurchase the same holding in their own account, keeps the investment in the family while banking the tax-free allowance.
Pension Contributions to Extend the Basic Rate Band
A gross personal pension contribution extends your basic rate band by the same amount, which can keep more of a gain inside the 18% rate rather than the 24% rate once the exemption has been used.
Anyone planning a larger property disposal should also review our detailed guide on how to reduce Capital Gains Tax on property with legal planning, and landlords in particular should check who pays 24% Capital Gains Tax before assuming the higher rate applies.
Why Work With a Capital Gains Tax Specialist
Deciding how to use the annual exempt amount for CGT correctly – across individuals, trusts, and estates – often determines whether a family keeps thousands of pounds or hands it to HMRC unnecessarily. At Capital Gains Tax Experts, we focus exclusively on capital disposals and work out the most tax-efficient way to combine exemptions, reliefs, and timing before you sell. To understand how this allowance fits into the wider picture of your liability, see who actually pays Capital Gains Tax in the UK and how Capital Gains Tax differs from Income Tax.
Frequently Asked Questions – People Also Ask
What is the annual exempt amount for CGT in 2026/27?
It is £3,000 for individuals, personal representatives, and trustees for disabled people, and £1,500 for most other trustees.
Can I carry forward an unused annual exempt amount to the next tax year?
No. The annual exempt amount for CGT operates strictly within each tax year. Any unused portion is lost on 5 April and cannot be carried forward, carried back, or transferred to another person.
Do trustees receive the full £3,000 allowance?
Only trustees acting for a disabled beneficiary receive the full £3,000. Most other trusts receive £1,500, split between multiple trusts created by the same settlor subject to a £300 minimum per trust.
How does the annual exempt amount apply to joint property sales?
Each joint owner applies their own annual exempt amount for CGT against their share of the gain, based on their percentage of ownership.
Does the annual exemption reduce the amount I need to report to HMRC?
It reduces the tax you owe, but you may still need to report a disposal if your total proceeds exceed £50,000, or within 60 days if you sold UK residential property, even if your gain is fully covered by the exemption.
Conclusion
The annual exempt amount for CGT is one of the simplest reliefs in the UK tax system, but its value has fallen dramatically, from £12,300 to just £3,000 for individuals and £1,500 for most trustees. Using it correctly each year, coordinating it across spouses, trusts, and estates, and combining it with sensible timing can still make a meaningful difference to your final tax bill. For the official rates and historical allowance table, see GOV.UK – Capital Gains Tax rates and allowances. If your situation involves more than one entity type, our specialists can review your position before you file.
