Tax Planning
Flexing Tax Planning: Capital Gains & Carried Interest Changes from April 2026
Significant changes to Capital Gains Tax rates, allowances and the taxation of carried interest require fresh tax planning for individuals, trustees, and fund managers.
By NomadicTax Research Team • 5-8 min read • May 13, 2026
## Overview of Key CGT & Carried Interest Reforms
From **6 April 2026**, the UK has introduced several important changes:
- **Capital Gains Tax (CGT) rates** change for non-property assets: basic rate taxpayers pay **18%**, higher/additional rate pay **24%**. Personal CGT annual exemption (Annual Exempt Amount, AEA) is £3,000. ([gov.uk](https://www.gov.uk/capital-gains-tax/rates?utm_source=openai))
- **Carried Interest regime** moves wholly into the **Income Tax framework**, i.e. carried interest is taxed as trading profits under Income Tax & Class 4 NICs, for gains arising on or after 6 April 2026. ([gov.uk](https://www.gov.uk/government/calls-for-evidence/the-tax-treatment-of-carried-interest-call-for-evidence/outcome/the-tax-treatment-of-carried-interest-government-response-and-policy-update-june-2025-accessible?utm_source=openai))
## Strategic Planning Moves
### Individuals with Significant Gains (non-property)
- If you expect gains, try to bring them into a tax year where you're a basic rate taxpayer vs higher rate: e.g. defer gains or reduce other taxable income.
- Use up your **AEA (£3,000 per year)** by disposing small lots now rather than later.
- Consider trusts or gifting to spouses/civil partners to spread gains across multiple taxpayers.
### Fund Managers & Carried Interest Holders
- Ensure clear record of service days in UK vs overseas: non-UK residents taxed only on carried interest from services performed in UK or meeting workday threshold. ([gov.uk](https://www.gov.uk/government/calls-for-evidence/the-tax-treatment-of-carried-interest-call-for-evidence/outcome/the-tax-treatment-of-carried-interest-government-response-and-policy-update-june-2025-accessible?utm_source=openai))
- Determine qualifying vs non-qualifying carried interest: only **72.5%** of profits considered qualifying (i.e. eligible for favorable relief). The rest taxed as full trading income. ([gov.uk](https://www.gov.uk/government/calls-for-evidence/the-tax-treatment-of-carried-interest-call-for-evidence/outcome/the-tax-treatment-of-carried-interest-government-response-and-policy-update-june-2025-accessible?utm_source=openai))
- Review fund investment structures, holding periods, and asset mix to maximize qualifying treatment.
### Trustees & Personal Representatives
- For dispositions by trusts or estates, gains will still be taxed at **24%** on non-property assets, and CGT regime changes do **not apply to carried interest**, as it's taken out of CGT. ([gov.uk](https://www.gov.uk/capital-gains-tax/rates?utm_source=openai))
## Example “What Ifs”
- **Alice** expects £50,000 gain from selling shares. Under old system she is higher rate taxpayer, taxed heavy. By March she realises some gains, stays in basic rate band. Planning reduces exposure after April when 24% applies.
- **Bob**, a fund manager, receives £200,000 carried interest in tax year 2026-27. Suppose £150,000 qualifies, £50,000 non-qualifying. He treats £50,000 as trading income, pays full Income Tax plus NICs. The £150,000 qualifying portion is multiplied by 72.5% = £108,750 treated as qualifying trading profit.
## Actionable Checkpoints
- Review your 2025-26 tax year income and gains forecast to determine if any early disposals or deferrals make sense before 6 April 2026.
- Track carried interest agreements carefully: establish documentation of asset-level average holding period (AHP), ensure conditions are met for qualifying status.
- For non-UK residents, assess UK workdays vs double-tax treaties—seek advice.
## Takeaways
These changes materially shift how gains and carried interest are taxed in the UK. Individuals, investors, fund managers, and other stakeholders who plan effectively—leveraging income planning, qualifying provisions, and structural checks—can optimize tax outcomes. But mis-steps (e.g. missing deadlines, non-qualifying status) can be costly.