Last updated: 14 October 2026
Is capital gains tax going back to income tax rates?
Not yet. In the Autumn Budget on 30 October 2024, the government raised the main CGT rates to 18% and 24%, rather than aligning them with income tax rates of 20%, 40% and 45%. Those rates still apply in 2026/27. Business Asset Disposal Relief and Investors’ Relief rose to 14% in April 2025 and 18% from 6 April 2026. So CGT is closer to income tax than it was, but it hasn’t returned to the system used between 1988 and 2008.
A short history of CGT rates
| Period | Rates |
| 1988 to 2008 | Gains taxed at your income tax rate, with taper or indexation |
| 2008 to 2010 | Flat 18% |
| 2010 to 2016 | 18% and 28% |
| 2016 to October 2024 | 10% and 20% (18% and 28% for residential property) |
| From 30 October 2024 | 18% and 24% for all assets |
| From 6 April 2026 | BADR and Investors’ Relief at 18% |
The annual exempt amount
The tax-free amount fell from £12,300 in 2022/23 to £6,000 in 2023/24, and has been £3,000 since 2024/25. Many more people now pay CGT on small gains, such as share sales.
Could rates rise further?
The government has said it has no plans to align CGT with income tax rates, but no future Budget can be ruled out. Arguments for and against aligning include:
- For: fairness between earned income and gains, and less incentive to convert income into gains
- Against: gains may include inflation, and high rates could discourage investment and sales, reducing tax receipts
What this means for you
- Use your £3,000 annual exempt amount each year
2. Hold investments in ISAs and pensions where you can
3. Consider transfers to your spouse to use their exemption and basic rate band
4. Check whether BADR applies before selling a business
5. Report and pay CGT on UK residential property within 60 days
Example
Owen sells shares in 2026/27 with a gain of £40,000. He’s a higher-rate taxpayer. His taxable gain is £37,000 after the annual exemption, and he pays £8,880 at 24%. Before October 2024, he’d have paid 20%, or £7,400, and before April 2023 his exemption was £12,300.
Timing a sale
A lower-income year, such as the year after you retire, may let more of a gain fall within the basic rate band at 18%. Selling assets in stages across tax years spreads gains over more annual exemptions. If you expect rates to change, there is no reliable way to predict a Budget, so base the decision on your own plans rather than rumours. Contracts for a sale are usually treated as made on exchange, not completion.
Losses
Capital losses can be set against gains in the same year, and unused losses carry forward without time limit. You must report a loss to HMRC within 4 years of the end of the tax year in which it arose to be able to use it.
Frequently asked questions
Is CGT on property higher than on shares?
No, both have been taxed at 18% and 24% since 30 October 2024.
Did the BADR limit change?
No, it is still £1 million of lifetime gains.
Can I spread a sale over two tax years?
Yes, which uses two exemptions.
Are main homes affected?
No, private residence relief still applies.
Related: reliefs to reduce gains on shares, the CGT reporting deadline and Business Asset Disposal Relief update.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with capital gains tax planning. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
