The CGT annual allowance, officially the annual exempt amount, is £3,000 per person for 2026/27. It lets you make £3,000 of capital gains each tax year with no Capital Gains Tax to pay, but it cannot be carried forward, so any part you do not use by 5 April is lost. Using it effectively means realising gains every year, sharing assets with your spouse or civil partner, and sheltering investments in ISAs and pensions.
The allowance has been cut from £12,300 in 2022/23 to £6,000 in 2023/24 and £3,000 from 2024/25, so many more investors and property owners now pay CGT. HMRC sets out the current figures on its page about Capital Gains Tax allowances.
This guide explains how the CGT annual allowance works in 2026/27, seven ways to use it effectively, a worked example and the rules you must follow when reporting gains.
What Is the CGT Annual Allowance for 2026/27?
| Who | Annual exempt amount 2026/27 |
|---|---|
| Individuals | £3,000 |
| Personal representatives (estates), for the year of death and the next two tax years | £3,000 |
| Most trusts | £1,500 |
| Trusts for disabled beneficiaries | £3,000 |
Gains above the allowance are taxed at 18% within your unused basic rate band and 24% above it, for both property and other assets. Our guides to the annual exempt amount for 2026 and CGT rates for 2026 explain the detail.
7 Ways to Use Your CGT Annual Allowance Effectively
1. Realise gains every tax year
Because the CGT annual allowance cannot be carried forward, selling enough of an investment each year to use the £3,000 means those gains are never taxed. Over ten years that is £30,000 of gains taken tax-free, rather than one large taxable gain later.
2. Bed and ISA
Sell shares or funds held outside an ISA to realise a gain within your allowance, then buy them back inside your Stocks and Shares ISA, which has a £20,000 annual limit. Future growth is then free of CGT. HMRC’s guide to Individual Savings Accounts explains the limits. Our guide to ISA and pension wrappers for CGT covers this in more depth.
3. Watch the 30-day rule
If you sell shares and buy the same shares back in your own name within 30 days, the sale is matched with the repurchase and the gain may not be what you expected. This is often called the bed and breakfast rule. Buying back inside an ISA or pension, or after 30 days, avoids it. HMRC’s HS284 helpsheet on shares and CGT explains the matching rules.
4. Use your spouse’s allowance
Transfers between spouses and civil partners who live together are on a no gain, no loss basis. Moving assets into joint names, or to the spouse who will sell, means two CGT annual allowances and two basic rate bands. See our guide to CGT on jointly owned property.
5. Time disposals around 5 April
If you plan to sell several assets, splitting the sales between two tax years gives you two allowances. Selling just before and just after 5 April can double the tax-free amount within a few days.
6. Use losses wisely
Losses made in the same tax year are set against your gains first, even if that wastes part of your CGT annual allowance. Losses brought forward from earlier years are only used to reduce your net gains down to the allowance, so none of it is wasted. You must claim a loss within four years of the end of the tax year it arose. See HMRC’s guidance on claiming capital losses.
7. Shelter future growth
Pensions and ISAs are free of CGT, so moving investments into them each year reduces the gains you will face later. Our guide to a tax-efficient portfolio shows how to combine them.
Worked Example: Using the CGT Annual Allowance on a Share Portfolio
Tom, a higher rate taxpayer, has a share portfolio with £9,000 of unrealised gains. His wife, Lucy, is a basic rate taxpayer with plenty of her basic rate band unused.
| Option | How the gain is taxed | CGT payable |
|---|---|---|
| Tom sells everything in 2026/27 | £9,000 – £3,000 allowance = £6,000 at 24% | £1,440 |
| Tom transfers half to Lucy, both sell in 2026/27 | £4,500 each, less £3,000 each: Tom £1,500 at 24%, Lucy £1,500 at 18% | £630 |
| Tom and Lucy share it and sell over two tax years | £2,250 each per year, within both allowances every year | £0 |
With a little planning, the same £9,000 gain goes from a £1,440 tax bill to nothing. Use our shares CGT calculator to test your own figures.
Reporting Gains and the Annual Allowance
You do not need to report gains that are within your CGT annual allowance, unless you are in Self Assessment and your total sale proceeds for the year are more than £50,000. If your gains exceed the allowance, report them on your Self Assessment return by 31 January after the tax year ends. For UK residential property, any tax due must be reported and paid within 60 days of completion. See our guide to the 60-day capital gains tax rule.
Frequently Asked Questions
What is the CGT annual allowance for 2026/27?
£3,000 for individuals and estates, and £1,500 for most trusts. Gains up to this amount in a tax year are free of Capital Gains Tax.
Can I carry forward my unused CGT allowance?
No. The annual exempt amount is use it or lose it. Any part not used by 5 April is lost, which is why realising gains each year is a common strategy.
Can married couples combine their CGT allowances?
Each spouse has their own £3,000 allowance. By transferring assets between you, which is free of CGT if you live together, you can use both allowances and both basic rate bands.
What is bed and ISA?
Selling investments held outside an ISA to use your CGT allowance, then buying them back inside an ISA so future growth is tax-free. Buying back in an ISA is not caught by the 30-day rule.
Do I need to report gains below the annual exempt amount?
Usually not. If you are in Self Assessment and your total disposal proceeds exceed £50,000, you must still report the disposals even if the gain is within the allowance.
Do losses reduce my CGT annual allowance?
Same-year losses are set against gains in full, which can waste part of the allowance. Brought-forward losses only reduce gains down to £3,000, so the allowance is preserved.
Conclusion
The CGT annual allowance may only be £3,000, but used every year, and by both spouses, it can take thousands of pounds of gains out of tax. Realise gains regularly, use bed and ISA, time disposals around 5 April, and use losses carefully.
Because the allowance cannot be carried forward, the best time to act is before the end of each tax year.
For a plan to use your CGT annual allowance effectively, speak to our CGT tax planning specialists. Call us on +44 (0)1204 859315 or send us your question for a free initial consultation and a fixed-fee quote within 24 hours.
