What Is the Capital Gains Tax (CGT) Allowance in 2025/26?

If you’re selling shares, property (that isn’t your main home), crypto, or other investments, one of the first questions you’ll ask is:

How much can I make before paying Capital Gains Tax?

The answer depends on your Capital Gains Tax annual exempt amount, commonly called the CGT allowance.

In 2025/26, the CGT allowance is significantly lower than it was just a few years ago — which means more people are now paying Capital Gains Tax.

In this guide, we explain:

• What the CGT allowance is in 2025/26
• How it works
• What assets it applies to
• Current CGT rates
• How to reduce your CGT bill legally

What Is the CGT Allowance in 2025/26?

For the 2025/26 tax year, the Capital Gains Tax annual exempt amount is:

£3,000 per individual.

This means:

• You can make total gains of up to £3,000 in the tax year before paying CGT.
• Gains above £3,000 are taxable.

Just a few years ago, the allowance was over £12,000. The reduction to £3,000 means careful planning is now more important than ever.

How Does the CGT Allowance Work?

The £3,000 exemption applies to your net gains for the tax year.

This means:

1. Add together all your capital gains.

2. Deduct any allowable capital losses.

3. Apply the £3,000 annual exemption.

4. Pay CGT on the remaining amount.

If your total gains are below £3,000, no CGT is payable (although reporting rules may still apply in some cases).

Example: Selling Shares in 2025/26

You sell shares and make:

• Gain: £10,000

Step 1: Deduct CGT allowance
£10,000 – £3,000 = £7,000 taxable gain

You pay CGT only on £7,000.

Without planning, that full £10,000 might otherwise have been exposed to tax.

What Are the CGT Rates in 2025/26?

CGT rates depend on:

• The type of asset
• Your total taxable income

For most assets (e.g. shares, crypto, business disposals not qualifying for special relief):

• 18% for basic rate taxpayers
• 24% for higher and additional rate taxpayers

For residential property (not your main home):

• 18% (basic rate band)
• 24% (higher rate band)

The rate applied depends on how much of your basic rate band remains after income.

What Assets Does the CGT Allowance Apply To?

The £3,000 annual exemption applies to most chargeable assets, including:

• Shares and investments
• Buy-to-let property
• Second homes
• Cryptocurrency
• Business assets
• Investment funds

It does not apply to:

• Your main home (if fully covered by Private Residence Relief)
• ISAs
• Pensions
• Certain government bonds

Can Married Couples Use Two CGT Allowances?

Yes.

Each individual has their own £3,000 annual exemption.

So a married couple could potentially realise:

£6,000 of gains tax-free per year.

Assets can usually be transferred between spouses at no gain/no loss for CGT purposes, allowing planning opportunities before disposal.

This can be particularly useful when selling:

• Investment portfolios
• Buy-to-let property
• Shares in a family company

What Happens If You Don’t Use Your CGT Allowance?

Unlike the Income Tax Personal Allowance, the CGT annual exemption:

• Cannot be carried forward.
• Must be used within the tax year.

If you do not realise gains in that year, the allowance is lost.

This is why some investors use “bed and ISA” or “bed and spouse” strategies to crystallise gains each year.

Can You Reduce CGT by Using Losses?

Yes.

Capital losses can be offset against capital gains.

For example:

• Gain on shares: £12,000
• Loss on crypto: £4,000

Net gain: £8,000

Apply £3,000 allowance:

Taxable gain = £5,000

Unused losses can usually be carried forward to future tax years.

What About Business Asset Disposal Relief?

If you qualify for Business Asset Disposal Relief (BADR), gains up to your lifetime limit are taxed at:

• 14% for disposals on/after 6 April 2025 (2025/26)
• 18% for disposals on/after 6 April 2026 (2026/27 onwards)

The £3,000 CGT allowance still applies before the BADR rate is calculated.

So even business owners benefit from the annual exemption.

CGT on Property: Does the Allowance Apply?

Yes — the £3,000 exemption applies to gains on:

• Buy-to-let property
• Second homes

However, property disposals also require:

• Reporting within 60 days of completion
• Payment of CGT within that period

Failure to report on time can lead to penalties.

Planning Strategies to Reduce CGT in 2025/26

With the allowance now at just £3,000, proactive planning is key.

1. Use Both Spouses’ Allowances

Transfer assets before sale where appropriate.

2. Spread Disposals Across Tax Years

If selling a large investment portfolio, consider:

• Selling part before 5 April
• Selling part after 6 April

This can use two years’ allowances.

3. Use Capital Losses

Review historic investments to identify loss opportunities.

4. Consider ISAs

Moving investments into ISAs (“bed and ISA”) shelters future gains from CGT.

5. Time Sales Around Income

If you are close to the basic rate threshold, selling in a lower-income year may reduce your CGT rate from 24% to 18%.

Why More People Are Paying CGT Now

The reduction of the annual exemption to £3,000 means:

• Small investors are now caught
• Accidental gains trigger tax
• Crypto investors are more exposed
• Property landlords face higher effective tax

Many people who previously paid no CGT now fall within scope.

Example: Landlord Selling a Buy-to-Let

Sale proceeds generate:

• Gain: £50,000

After applying £3,000 allowance:

Taxable gain = £47,000

If the landlord is a higher-rate taxpayer:

CGT at 24% = £11,280

The small allowance now provides only limited shelter.

Final Answer: What Is the CGT Allowance in 2025/26?

In 2025/26, the Capital Gains Tax annual exempt amount is:

£3,000 per individual.

You only pay CGT on gains above that amount, after deducting losses.

With the allowance significantly reduced compared to previous years, careful tax planning is increasingly important when disposing of:

• Property
• Shares
• Crypto
• Business assets

As always, individual circumstances vary and professional advice should be taken before disposing of significant assets.