Tax Planning
What the Fall in Capital Gains Tax Free Allowance Means for Investors in 2026-27
With the UK cutting the CGT annual exempt amount for 2026-27, investors must rethink planning strategies to avoid surprises at tax filing time.
By NomadicTax Research Team • 5-8 min read • June 17, 2026
## The change in CGT allowance and rates
From **6 April 2026**, the **annual exempt amount** for Capital Gains Tax (CGT) dropped significantly, and new rates apply: for gains after that date, **basic rate taxpayers pay 18%**, and **higher/additional rate taxpayers pay 24%**, on disposals of chargeable assets.([gov.uk](https://www.gov.uk/capital-gains-tax/rates?source=post_page---------------------------&utm_source=openai))
The exemption itself (i.e. the tax-free allowance for gains) has also been reduced – part of efforts to raise more revenue and tighten thresholds.([gov.uk](https://www.gov.uk/capital-gains-tax/rates?source=post_page---------------------------&utm_source=openai))
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## Implications for different types of investors
- **Casual investors**: if you expected to sell shares or investments and held gains near the old exemption threshold, you may now pay CGT where you didn’t before.
- **Property owners**: selling second homes or investment property will involve more careful timing and consideration of allowable expenses to mitigate gains.
- **Trustees or personal representatives**, who now pay 24% as higher rate from start of the 2026-27 tax year.([gov.uk](https://www.gov.uk/capital-gains-tax/rates?source=post_page---------------------------&utm_source=openai))
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## Strategies to reduce CGT liability
1. **Use other reliefs** where available—Business Asset Disposal Relief, Investors’ Relief, etc. These can reduce effective rates or exempt certain gains.
2. **Plan asset disposals across tax years**, to utilise lower-rate bands or spread gains to avoid pushing into higher rate.
3. **Offset gains with losses**—if you have loss-making investments, dispose of them in the same CGT year to reduce taxable amount.
4. **Hold investments past death**—when assets pass on death, capital gains are generally not charged, resetting base cost.
5. **Use ISAs and other exempt wrappers**—investing via Individual Savings Accounts or UK pension schemes can avoid CGT entirely.
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## Real examples
- Alice, with £50,000 taxable income, plans to sell shares for a gain of £10,000 in Year 1 and £5,000 in Year 2. Under previous rates, she may have avoided CGT altogether; now, in Year 1, she’ll pay **18% on gains exceeding the reduced exemption**. Spreading disposals may reduce exposure.
- Bob, a landlord selling a buy-to-let property: high property-related costs can be deducted to lower gain and keep under higher rate thresholds.
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## What investors should do now
- Review your portfolio: identify any assets with potential gains and decide whether a disposal this tax year or next is more tax-efficient.
- Keep meticulous records of purchase costs, improvement costs, legal fees, and allowable reliefs—these reduce the gain.
- Speak with a tax adviser for large or complex disposals—business assets, inherited assets often have shaping rules.
- Be aware of changes in rates and thresholds, including interplay with income tax bands—higher income may push gains into higher CGT rates.
- Use reporting deadlines: CGT is due by 31 January following the end of the tax year in which the disposal occurred. Plan ahead.
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## Summary
The 2026-27 changes to Capital Gains Tax make thresholds tighter and rates heavier for many taxpayers—especially higher-earning individuals and property or investment sellers. But with forward planning—timing, reliefs, loss utilization—there are legitimate ways to keep your CGT liability in check.