With the 2026/27 tax year already underway, Capital Gains Tax (CGT) planning should be high on your list. Allowances are now far less generous than in previous years, which means more individuals are paying tax on gains that would once have been covered.
Taking action early in the tax year gives you more control over how and when gains are realised, and how much tax you ultimately pay.
The 2026 CGT Allowance
For the 2026/27 tax year, the annual Capital Gains Tax allowance remains at:
- £3,000 per individual
This is a significant reduction from the £12,300 allowance available only a few years ago. As a result, even relatively small disposals can now create a tax liability.
If your total gains exceed £3,000 within the tax year, CGT will apply to the excess.
What Triggers Capital Gains Tax?
You may be liable for CGT when disposing of assets such as:
- Investment portfolios and shares
- Second properties or buy-to-let properties
- Business assets
- High-value personal items
You are taxed on the profit (gain) rather than the total sale value.
CGT Rates in 2026
The rate of CGT depends on your overall income position and the type of asset:
Standard assets:
- 10% for basic rate taxpayers
- 20% for higher and additional rate taxpayers
Residential property (not your main home):
- 18% for basic rate taxpayers
- 24% for higher and additional rate taxpayers
Understanding where your income sits is essential when planning disposals.
Why Timing Matters at the Start of the Tax Year
Using your CGT allowance early in the tax year creates opportunities that are not available later on.
You can:
- Spread disposals across multiple tax years
- Make use of future allowances as they arise
- Offset gains with any realised losses
- Adjust your strategy if your circumstances change
Waiting until the end of the tax year limits these options and may result in unnecessary tax.
Planning as a Couple
Spouses and civil partners each receive their own £3,000 allowance. This creates an opportunity to double the tax-free threshold to £6,000, but only if assets are structured correctly.
Transferring assets between spouses before disposal can be an effective way to:
- Maximise both allowances
- Reduce the overall CGT liability
- Make better use of lower tax bands
These transfers must be completed in advance of any sale, so early planning is essential.
Practical Ways to Use Your Allowance
To make the most of your CGT position in 2026, consider:
- Realising gains gradually rather than in one large disposal
- Offsetting losses against gains where available
- Using tax-efficient wrappers such as ISAs for future investments
- Reviewing your portfolio regularly to identify opportunities
Each of these strategies works best when implemented with a clear plan.
Increased Focus from HM Revenue & Customs
HMRC continues to expand its data-sharing capabilities and compliance activity. Property disposals, share transactions and cryptocurrency gains are all areas receiving greater attention.
For residential property sales, CGT must be reported and paid within 60 days of completion, making accurate and timely reporting essential.
Don’t Leave It Too Late
The reduction in the CGT allowance means that proactive tax planning is more important than ever. Decisions made early in the tax year can significantly affect your overall tax position.
Leaving everything until just before the deadline often leads to missed opportunities and higher tax bills.
If you want to review your Capital Gains Tax position for 2026, North Devon Accounts can help you plan effectively. Get in touch today to ensure you are making the right decisions at the right time and making full use of the allowances available to you.
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