Capital Gains Tax Allowance 2026/27: The £3,000 Explained
Last updated 24 June 2026 · 9 min read · By the LandlordTaxAi Editorial Team
The short answer
The CGT annual exempt amount for 2026/27 is £3,000 per person — the tax-free slice of your total gains for the year. A couple who jointly own a property can use £6,000 between them. Above the allowance, residential property gains are taxed at 18% (basic rate) or 24% (higher rate). The allowance is use-it-or-lose-it — it does not carry forward.
The Capital Gains Tax allowance used to be generous enough that many modest property sales escaped tax entirely. Not any more. After two sharp cuts, it now sits at just £3,000 — a quarter of what it was in 2022/23. For landlords selling up, that change alone can mean thousands of pounds of extra tax. This guide shows exactly how the allowance works and the legitimate ways to make the most of it. To put real numbers on your own sale, use our CGT calculator and read the full how to calculate CGT on property guide.
How the allowance has fallen
| Tax year | Annual exempt amount |
|---|---|
| 2022/23 | £12,300 |
| 2023/24 | £6,000 |
| 2024/25 | £3,000 |
| 2026/27 | £3,000 |
The same £3,000 allowance covers all your gains for the year — shares, second properties, anything — not £3,000 per asset. Plan your disposals with that single allowance in mind.
A worked example
Priya, a higher-rate taxpayer, sells a buy-to-let she owns alone. Her gain after costs and improvements is £40,000.
| Gain after costs | £40,000 |
| Less annual exempt amount | − £3,000 |
| Taxable gain | £37,000 |
| CGT at 24% (higher rate, residential) | £8,880 |
Had Priya and her spouse owned the flat jointly, they would have split the £40,000 gain and deducted £3,000 each — £6,000 in total — and potentially used some of a spouse’s basic-rate band at 18%. The allowance and band-planning together can save several thousand pounds.
Free calculator · no sign-up
Capital Gains Tax calculator
Estimate the CGT on your property sale for 2026/27
Result
- Total gain
- £66,000
- Less annual exempt amount
- − £3,000
- Taxable gain
- £63,000
- CGT at 24%
- £15,120
- Net proceeds after CGT
- £50,880
Estimate based on verified 2026/27 UK rates. Informational only — not personal tax advice.
Know your CGT bill before you sell
Our free CGT calculator applies the £3,000 allowance and the 18%/24% rates so you can see your likely bill — and plan around it.
Try the CGT calculatorThree legitimate ways to use the allowance well
- Own jointly with a spouse. Two allowances (£6,000) and potentially two basic-rate bands. Transfers between spouses are no-gain, no-loss — but record ownership properly and before the sale.
- Straddle two tax years. Where a sale can be timed, completing in a different tax year to other gains can use a second £3,000 allowance and a fresh basic-rate band.
- Bank your costs and reliefs first. Improvements, buying and selling costs, and Private Residence Relief reduce the gain before the allowance — keep every receipt.
For more, see our guide on how to reduce CGT on a property sale.
Frequently asked questions
What is the Capital Gains Tax allowance for 2026/27?
The CGT annual exempt amount for the 2026/27 tax year is £3,000 per person. This is the slice of total gains you can make in the year before any Capital Gains Tax is due. It has fallen sharply — from £12,300 in 2022/23 to £6,000 in 2023/24 and £3,000 from 2024/25 onwards — so far more property sales now produce a tax bill than a few years ago.
How does the allowance work when I sell a rental property?
You work out your gain (sale price minus purchase price, buying and selling costs, and qualifying improvements), then deduct the £3,000 annual exempt amount. Only the remainder is taxed. For example, a £40,000 gain becomes £37,000 of taxable gain after the allowance. The allowance applies once across all your gains in the year, not once per property.
Can my spouse and I both use the allowance?
Yes — and it is one of the most valuable moves available. Each person has their own £3,000 allowance, so a couple who jointly own a property share the gain and deduct £6,000 between them. Transfers between spouses or civil partners happen on a 'no gain, no loss' basis, so moving a share of a property into joint names before selling can double the allowance and use a lower-rate band. Get advice before transferring, as timing and ownership records matter.
What are the CGT rates on residential property in 2026/27?
Gains on residential property are taxed at 18% for any part falling within your basic-rate Income Tax band, and 24% above it. These residential rates are unchanged from 6 April 2026. Your taxable gain is stacked on top of your income to decide how much falls in each band, so a higher-rate taxpayer typically pays 24% on most of a property gain.
Does the allowance carry forward if I don't use it?
No. The annual exempt amount is use-it-or-lose-it. If you make no gains in a tax year, the £3,000 is simply gone — it does not roll into next year. This is why spreading disposals across two tax years, where practical, can use two years' worth of allowance (£6,000 for an individual) and sometimes two basic-rate bands.
Do I still report the gain if it's under the allowance?
For UK residential property, if there is no Capital Gains Tax to pay because the gain is covered by the allowance or reliefs, you generally do not need to file the 60-day property return. But if any tax is due, you must report and pay within 60 days of completion. Keep your figures either way — HMRC can ask you to show how you reached them.
Written and reviewed by the LandlordTaxAi Editorial Team. Our guides are reviewed against current HMRC guidance and updated when the rules change. Operated by LandlordTaxAi, United Kingdom. Follow us on LinkedIn.
Last reviewed: 24 June 2026 · Based on HMRC’s “Capital Gains Tax rates and allowances” guidance: the £3,000 annual exempt amount for 2026/27, the 18% and 24% residential property rates (unchanged from 6 April 2026), the no-gain-no-loss spouse transfer rules and the 60-day property reporting rules. This article is informational only and does not constitute tax advice. Check the latest details on GOV.UK or with a qualified accountant.