Published: June 2026 | Fact-Checked & Audited By: David Vance, CTA FCA (Chartered Tax Advisor & Accountant)
This guide is fully updated for the 2026/27 HMRC tax year. All calculations and tax rules have been audited against official UK legislation.
Capital Gains Tax (CGT) can eat into your investment returns and property profits, but every individual in the UK is entitled to a tax-free allowance. This allowance, officially known as the Annual Exempt Amount (AEA), is a valuable tool to shield your gains from tax. However, the allowance has been significantly reduced in recent years. In this guide, we explain how the CGT allowance works for the 2026/27 tax year, who is entitled to it, and how to maximize it legally.
What is the Capital Gains Tax Allowance for 2026/27?
For the 2026/27 tax year, the Capital Gains Tax annual exempt amount is **£3,000** for individuals, personal representatives, and certain types of trusts. For other trusts, the allowance is generally capped at **£1,500**. This means that if your total capital gains across all disposals (shares, property, crypto, etc.) in the tax year are £3,000 or less, you will pay £0 in Capital Gains Tax.
The Use-It-or-Lose-It Rule
The annual exempt amount is a **”use-it-or-lose-it”** allowance. Unlike some other tax reliefs, you cannot carry forward any unused allowance to the next tax year. If you make £1,000 of gains this year, the remaining £2,000 allowance is permanently lost. This makes careful timing of asset sales critical to ensure you utilize your allowance each year.
Tax-Free CGT Allowances over Time
The table below shows how the annual exempt amount has been reduced over recent tax years:
| Tax Year | Individual Annual Exempt Amount (AEA) | Trust Annual Exempt Amount |
|---|---|---|
| 2022/23 | £12,300 | £6,150 |
| 2023/24 | £6,000 | £3,000 |
| 2024/25 to 2026/27 | £3,000 | £1,500 |
Reforms for Non-Domiciled Individuals (Non-Doms)
For individuals who were previously claiming the non-domiciled tax status, the landscape has changed dramatically. The remittance basis of taxation was officially abolished on 5 April 2025. In the 2026/27 tax year, the new residence-based scheme applies, offering a 4-year exemption window on Foreign Income and Gains (FIG) for new arrivals. After this 4-year period, all worldwide capital gains are subject to UK Capital Gains Tax at standard rates, and the £3,000 allowance applies to their global disposals.
To see how your taxable gains interact with the current £3,000 allowance and compute your net tax bill, use our Capital Gains Tax Calculator.
What People Search For: FAQs on Capital Gains Tax Allowance
1. What is the capital gains tax allowance in 2026?
For the 2026/27 tax year, the capital gains tax allowance (annual exempt amount) is £3,000 for individuals. This is a permanent reduction from the older £12,300 and £6,000 thresholds seen in previous years.
2. Can I carry forward my unused capital gains tax allowance?
No. The capital gains tax allowance is strict: use it or lose it. If you do not make disposals to use up your £3,000 allowance in a given tax year, it cannot be carried forward to the next year.
3. Can spouses combine their capital gains tax allowances?
Yes. If you own an asset jointly with a spouse or civil partner, you can both use your individual £3,000 allowances, giving you a total of £6,000 of tax-free profit on a joint sale. You can also transfer assets to each other tax-free to achieve this.
4. How is the capital gains tax allowance calculated for trusts?
For most trusts, the annual exempt amount is £1,500 (exactly half of the individual allowance). However, if the settlor has set up multiple trusts, this allowance is divided equally among them, down to a minimum limit of £300 per trust.
5. Do children get a capital gains tax allowance?
Yes. Children are entitled to their own individual £3,000 annual exempt amount. However, if parent-funded assets generate significant gains, HMRC may attribute those gains back to the parents under anti-avoidance rules.
6. Does the capital gains tax allowance apply to gold and silver coins?
If you invest in British legal tender coins (such as Sovereign and Britannia gold/silver coins), they are completely exempt from Capital Gains Tax. You do not need to use your £3,000 allowance against profits made on these coins.
7. How do I claim my capital gains tax allowance?
You do not need to make a formal claim for the allowance; it is automatically applied to your total gains when you calculate your tax liability on your Self Assessment return or via HMRC’s real-time service.
8. Do I need to report gains to HMRC if they are under the £3,000 allowance?
If your total gains are under £3,000, you generally do not need to report them. However, you must report them if your total disposal proceeds (the sale values before subtracting purchase costs) exceed four times the allowance (£12,000) and you are already registered for Self Assessment.
9. Does the capital gains allowance apply to ISA and pension investments?
No, because investments held inside ISAs and pension funds are completely exempt from CGT anyway. Your £3,000 allowance is only needed for gains made on taxable assets outside these wrappers.
10. How does the CGT allowance apply to non-domiciled individuals under the new rules?
Following the complete abolition of the remittance basis on 5 April 2025, non-doms who have been UK residents for more than 4 years must pay UK Capital Gains Tax on their global disposals and are entitled to the standard £3,000 annual exempt amount. New arrivals within their first 4 years of UK residency can claim a 100% tax exemption on foreign gains under the new FIG (Foreign Income and Gains) regime, meaning they do not need to use their £3,000 allowance against those foreign gains.