Capital Gains Tax Budget 2026 UK: Current Rates, Rules and Planning Steps

The capital gains tax budget 2026 UK position is now settled for the near term. No further rate increases were announced in the autumn statement, and the structure introduced in October 2024 remains in place: 18 percent for basic-rate taxpayers and 24 percent for higher-rate taxpayers on most assets. Business Asset Disposal Relief completed its second rate increase in April 2026. For investors and property owners, the key questions now shift from whether rates will rise to how to plan around the rules that exist. This guide covers where the capital gains tax budget 2026 UK rates stand, what changed, and the tools available to reduce what you owe.

Capital Gains Tax Budget 2026 UK: What the Rates Are Now

Following the October 2024 Budget, the CGT rates on most assets were aligned more closely with income tax. Basic-rate taxpayers pay 18 percent on gains from shares, investment funds, and business assets. Higher and additional-rate taxpayers pay 24 percent. Residential property was already at these rates and was not changed at that budget.

The annual CGT exemption stands at £3,000. This was reduced from £12,300 in 2022/23 in stages, landing at £3,000 in 2024/25 and remaining there. A gain of £3,001 from selling shares now triggers a tax calculation that would have been entirely exempt in 2022.

No change to the annual exemption was announced in the autumn budget. Nor was any further rate increase. The autumn budget 2026 confirmed stability in the capital gains tax budget 2026 UK structure for at least the remainder of this parliament.

Business Asset Disposal Relief After the Second Rate Rise

Business Asset Disposal Relief (BADR), previously called entrepreneurs' relief, allows qualifying business owners to pay a lower CGT rate on the sale of qualifying business assets. The BADR rate stood at 10 percent until April 2025, when it rose to 14 percent. From April 2026, it rose again to 18 percent as announced in the October 2024 Budget.

At 18 percent, BADR still saves higher-rate taxpayers 6 percentage points compared to the standard 24 percent rate. The lifetime limit on qualifying gains taxable at the BADR rate remains at £1 million. Investors' Relief, which covers long-term investments in qualifying unquoted trading companies, follows the same rate schedule.

Business owners who were planning a sale and waiting to see whether rates would change further have a clearer picture now. The capital gains tax budget 2026 UK position is that BADR sits at 18 percent with no further scheduled increase announced. For anyone modelling an exit, that is the rate to plan around.

Property and CGT in 2026

Second homes, buy-to-let properties, and inherited residential properties are all subject to CGT at 18 or 24 percent on gains above the purchase price after allowable deductions such as improvement costs and legal fees.

Your main residence benefits from private residence relief, which exempts gains on a property that has been your sole or main home throughout your ownership period. Where you have lived in the property for only part of your ownership, a proportion of the gain may be exempt.

For landlords, the interaction between CGT and income tax creates a common trap: adding the gain to existing income pushes many landlords who were basic-rate taxpayers when they bought into the higher-rate band when they sell, particularly for properties that have appreciated substantially over time.

One rule that applies regardless of property type: CGT on UK residential property must be reported and paid within 60 days of completion. Missing this deadline results in interest and penalties even if the tax is later paid in full through self-assessment.

Six Ways to Reduce Your CGT Bill in 2026

The capital gains tax budget 2026 UK rates are not going down, but several legitimate planning tools can reduce or defer what you owe:

• Use the annual exemption each year. The £3,000 allowance resets on 6 April and cannot be carried forward. Realising gains up to that level annually, rather than letting them accumulate, keeps more growth outside the taxable calculation at the point of a larger sale.

• Bed and ISA. Selling shares outside an ISA and immediately repurchasing them inside a stocks and shares ISA crystallises any gain within the annual exemption and shelters all future growth from CGT. Disposals from inside the ISA are completely tax-free.

• Transfer between spouses. Assets transferred between spouses or civil partners are treated as no gain, no loss for CGT purposes. Both partners can then use their own annual exemption and tax band against gains on shared assets.

• Realise capital losses. Losses from disposals can be offset against gains in the same or future tax years. If you hold investments sitting at a loss, crystallising those losses before the tax year ends can reduce or eliminate gains made elsewhere.

• Timing disposals around income. If your income varies between tax years, a disposal timed for a lower-income year may keep you in the basic-rate band, saving 6 percent on the rate applied to the gain.

• Holdover and rollover reliefs. For qualifying business and agricultural assets, holdover relief can defer a CGT liability when assets are gifted, while rollover relief defers the charge when proceeds are reinvested in qualifying replacement assets.

What a Future Budget Could Change

The capital gains tax budget 2026 UK position has been explicitly described as stable for the near term. That said, the areas most likely to come under review in a future budget include the annual exemption, any further alignment of CGT and income tax rates, and the future of BADR beyond the current £1 million lifetime limit.

Investors and business owners who are holding back a sale or transfer because of uncertainty about rates now have a clearer picture. The current structure is confirmed. The risk of waiting is that future budgets could change the rules again, while acting now locks in today's known rates.

For the broader picture of how the budget affects savings, income tax and household finances, see our full guide on what the autumn budget 2026 means for UK households. And if you want to understand how savings interest fits into your tax position, the personal savings allowance UK 2026 guide covers the full allowance in detail.

This article is for informational purposes only and does not constitute financial advice. Always seek independent advice before making investment or tax decisions.