UK Capital Gains Tax (CGT) & Business Asset Disposal Relief 2026
Current UK Capital Gains Tax rates, the £3,000 Annual Exempt Amount, residential property reporting and Business Asset Disposal Relief (BADR) rules for disposals from 6 April 2026.
Capital Gains Tax Rates 2026/27
Calculate the taxable gain after allowable losses and reliefs, deduct the £3,000 Annual Exempt Amount, then add the taxable gain to taxable income. The part within the unused basic-rate band is taxed at 18%; the remainder is taxed at 24%.
💰 £3,000 Annual Exempt Amount
£3,000An individual generally pays CGT only on overall gains above the Annual Exempt Amount after allowable losses and reliefs.
🏢 Business Asset Disposal Relief (BADR)
- Qualifying Period: The relevant conditions generally must be met for at least 2 years before the disposal.
- Ownership: The claimant must be a sole trader or business partner and have owned the business for at least 2 years.
- Ceased Business: For a business that has ceased, qualifying business assets generally need to be disposed of within 3 years of cessation.
- Qualifying Period: The relevant conditions generally must be met for at least 2 years before disposal.
- Employment: The claimant must generally be an employee or office holder of the company or a company in the same trading group.
- Trading: The company must be a trading company or the holding company of a trading group.
- Personal Company: For non-EMI shares, the personal-company conditions generally require at least 5% of the ordinary share capital and 5% of the voting rights, together with the required economic entitlement.
- EMI Shares: Different conditions apply to qualifying Enterprise Management Incentive (EMI) shares.
🏠 CGT on UK Residential Property
Non-Residents: A non-UK resident generally must report disposals of UK property or land even where there is no CGT to pay.
Private Residence Relief: Private Residence Relief may reduce or eliminate CGT where the property qualifies as the individual's main residence, subject to the statutory conditions.
Self Assessment: Where the disposal must also be included in a Self Assessment return, the gain is reported there as well.
📈 Shares and Other Chargeable Assets
Reporting: Gains on assets other than UK residential property are generally reported through Self Assessment for the tax year in which the disposal occurred where a return is required.
Real-Time Service: Eligible taxpayers can use HMRC's real-time CGT service instead of waiting for the Self Assessment return.
- Calculate disposal gains and allowable losses.
- Apply available CGT reliefs.
- Deduct the £3,000 Annual Exempt Amount where available.
- Add the taxable gain to taxable income to determine the 18%/24% split.
📉 Capital Losses
Rule: Allowable capital losses can generally be deducted from capital gains under the CGT rules.
Claims: Capital losses should be claimed within the relevant statutory time limit, even where they do not produce an immediate tax saving.
CGT Reporting Deadlines
| Disposal Type / Channel | Statutory Deadline |
|---|---|
| Reportable UK residential property gains | 60 days from completion |
| Eligible taxpayers using HMRC's real-time CGT service | 31 December following the end of the tax year |
| Gains reported through Self Assessment | 31 January following the end of the tax year |
Late CGT Reporting
Initial Penalty: £100
Prolonged Delays: Additional penalties can apply for longer delays, including tax-based penalties after 6 and 12 months.
Interest: Late-payment interest can also apply.
🧮 BADR Example 2026/27
Scenario: An individual makes £500,000 of qualifying BADR gains in 2026/27 and has enough remaining lifetime BADR limit.
Tax Payable: The qualifying gain is taxed at 18% under BADR, assuming all statutory conditions are satisfied.
Frequently Asked Questions: UK Capital Gains Tax (CGT) & Business Asset Disposal Relief 2026
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Frequently Asked Questions
Individuals generally pay 18% on the part of their taxable gain that falls within their unused basic-rate band and 24% on the remainder. The Annual Exempt Amount is £3,000 for 2026/27.
The Business Asset Disposal Relief rate is 18% for qualifying disposals made on or after 6 April 2026. The rate was 14% for qualifying disposals between 6 April 2025 and 5 April 2026.
An individual can generally claim BADR on up to £1 million of qualifying gains over their lifetime. Earlier gains on which BADR was claimed reduce the remaining lifetime limit.
A reportable taxable gain on a UK residential property generally must be reported and the CGT paid within 60 days of completion. Non-UK residents generally have to report UK property or land disposals even when no CGT is ultimately payable.
No. The £3,000 Annual Exempt Amount is an annual allowance for the individual as a whole. It applies against the person's overall gains after allowable losses and reliefs, rather than separately to each disposal.
Potentially. For non-EMI shares, the company generally needs to be a trading company or holding company of a trading group, the claimant normally needs to be an employee or office holder, and the personal-company conditions generally require at least 5% of the ordinary share capital and voting rights plus the required economic entitlement for the 2-year qualifying period.
Common Taxpayer Misconceptions
✓ Rule: 14% applied from 6 April 2025 to 5 April 2026. The BADR rate is 18% from 6 April 2026.
✓ Rule: £1 million is the lifetime limit for qualifying gains.
✓ Rule: The Annual Exempt Amount is an annual individual allowance against total gains.
✓ Rule: A reportable taxable residential-property gain generally has a 60-day reporting and payment deadline.
✓ Rule: The required trading, employment, ownership and personal-company conditions must be satisfied.