Capital Gains Tax Allowance: Annual Exempt Amount Explained

The capital gains tax allowance is the total net gain you can make across everything you sell in a tax year before capital gains tax applies. The capital gains tax allowance 2026/27 figure is £3,000. Every individual gets one, it refreshes on 6 April, and whatever is unused by 5 April is gone for good.

The allowance stood at £12,300 in 2022/23. It was cut twice in the two tax years that followed, and gains that once sat comfortably inside it now produce a tax bill.

One share sale, a fund switch, or a second property changing hands can be enough.

So the mechanics are worth knowing properly, because this allowance behaves differently from the income tax allowances it gets compared to. It doesn’t roll over. It can’t be handed to a husband or wife. And where losses are in the picture, the order things happen in decides whether you keep the full £3,000 or waste part of it.

What follows covers the current figure and who gets it, how the allowance interacts with losses and with your other allowances, what couples can do with two of them, and when HMRC still wants to hear from you even though there’s no tax to pay.

One capital gains tax allowance covers every disposal

How much is the capital gains tax allowance? For 2026/27 it’s £3,000. What is the annual exempt amount, then? The same thing under its formal name, and the term you’ll meet on HMRC forms.

You’ll also see it written as the capital gains tax free allowance, the tax free capital gains allowance or the capital gains tax annual exemption. All four describe one figure.

GOV.UK records the same amount for 2024/25 and 2025/26, so it has been unchanged since 6 April 2024.

That’s the capital gains tax threshold explained in a line: a set slice of net gains each year, then tax on the rest. It’s a single figure covering every disposal you make in the tax year, not an allowance per asset. Sell shares in May and a holiday caravan in January, and one allowance covers the pair of them.

The capital gains tax allowance per person is the same whether you make one disposal or twenty.

Alongside individuals, the full amount also goes to personal representatives handling a deceased person’s estate and to trustees acting for disabled people. Most other trustees get half.

Non-residents selling UK residential property normally get the allowance on the same terms as UK residents, though companies disposing of UK residential property do not.

How the capital gains tax allowance was reduced

The capital gains tax allowance history over recent years is short and steep. HMRC’s published Capital Gains Tax rates and allowances set out the fall:

• In 2021/22 and 2022/23 the allowance was £12,300 for individuals and £6,150 for most trustees.
• It fell to £6,000 and £3,000 respectively in 2023/24.
• It halved again to £3,000 and £1,500 from 6 April 2024, and those figures have applied for 2024/25, 2025/26 and 2026/27.

The capital gains tax allowance reduced by three quarters in the space of two tax years. That matters for anyone comparing an old calculation with a new one, since a gain worked out against the 2022/23 allowance will look nothing like the same gain worked out today.

The capital gains tax exemption limit has held at the same level since April 2024, but the government can change it at any Budget, so a figure quoted in an older guide is worth a second look.

Losses come off your gains before the allowance

The order of this sum is easy to get backwards, and getting it wrong costs money.

According to GOV.UK’s guidance on what to do if you make a capital loss, a loss on one asset is deducted from gains made in the same tax year first. Offsetting losses against capital gains happens before the allowance is applied, not after.

There’s a catch in that ordering. Same-year losses come off in full, and HMRC’s capital gains manual is explicit that they apply even where the result takes your net gains below the allowance. In a year like that, part of the allowance goes to waste and nothing can be done about it.

Losses brought forward from earlier years work the other way. If your total gain is still above the allowance once same-year losses are deducted, you can bring old losses in, but only down to the level of the allowance. Anything left over stays available, so an old loss never eats into the allowance.

The rules on capital gains tax losses and allowance interaction come with a deadline:

• You claim a loss by including it on your Self Assessment tax return.
• You can carry forward capital losses indefinitely once they’ve been reported.
• There is a four year time limit capital gains loss claim window, running from the end of the tax year in which you disposed of the asset.
• Losses on assets given or sold to a spouse or civil partner can’t be claimed, and losses involving other family members or business partners can normally only be set against gains from that same person.

Reporting capital losses on a tax return is the usual route. Where someone has never made a gain and isn’t registered for Self Assessment, HMRC accepts a written claim instead.

Unused capital gains tax allowance disappears on 5 April

A tax year opens on 6 April and closes on 5 April. When does the capital gains tax allowance reset? On 6 April, automatically, for everyone.

Can you carry forward capital gains tax allowance you didn’t use? No. There’s no mechanism to roll it into next year and none to backdate it into last year. It’s a genuine use it or lose it CGT allowance, and unused capital gains tax allowance simply lapses at the end of 5 April.

Do you get a capital gains tax allowance every year? Yes, a fresh one each 6 April, whether or not you touched the previous one.

That annual reset is what makes timing useful. Staggering asset sales to use CGT allowance across two tax years, rather than selling everything at once, gives you two years of allowance instead of one:

• Sell part of a holding before 5 April and the balance after 6 April, and two full allowances fall outside the charge instead of one.
• Using your CGT allowance before 5 April only helps if you have gains to realise, so there’s no benefit in selling something at a loss purely to hit a date.
• For an unconditional contract the disposal date is the date the contract is made rather than the date it completes, so a March exchange falls in the old tax year even if the money arrives in April.

Where a contract is conditional, HMRC’s guidance puts the disposal date at the point the condition is satisfied, which can move it into a different year again.

Timing is only worth acting on where it makes commercial sense in the first place. Selling a good asset badly to save tax on the gain is a poor trade.

A couple has two capital gains tax allowances

Two things get muddled here, so it’s worth separating them. Is the CGT allowance transferable? No. You can’t give your allowance to your partner or add theirs to yours.

What you can move is the asset. Transferring assets to spouse capital gains tax treatment is on a no gain, no loss basis, so nothing is charged at the point of transfer.

Once an asset is jointly held, each owner has their own gain and each applies their own allowance.

That’s how the capital gains tax allowance for married couples effectively doubles, and it’s why capital gains tax allowance joint ownership comes up in planning. Splitting ownership to use two CGT allowances works like this on an £11,000 gain, using 2026/27 figures and the 24% rate:

• Held by one person, £3,000 is exempt and £8,000 is taxable.
• Held equally by two, each has a £5,500 gain, each applies £3,000, and £5,000 is taxable between them.

That’s £1,920 of tax against £1,200, a difference of £720. The saving tracks whatever the allowance and the higher rate happen to be, so the shape of it holds even when the numbers move.

The same logic sits behind the joint ownership arrangements set out in the landlord capital gains tax guide, though the reliefs available on residential property are different again.

One condition runs through all of this. HMRC’s helpsheet HS281 sets the no gain, no loss treatment for couples who are living together. Where a couple has separated, a transfer between them is normally treated as taking place at market value instead, which can create a charge at the point of transfer.

Your other tax-free allowances are unaffected

The allowance sits separately from the reliefs that apply to income.

Tax free allowances you can use together in the same year include the personal allowance for earnings, the dividend allowance and the personal savings allowance and CGT allowance side by side. Using one doesn’t reduce another.

The dividend allowance and capital gains allowance in particular get confused because both involve investments, but they cover different things: one is for dividend income, the other for profit on disposal. Many of the income allowances are covered separately in the library of UK tax guides.

Does capital gains tax affect personal allowance entitlement? Not directly, and here’s the distinction that matters. In HMRC’s method your personal allowance is deducted from your income, not from your gains.

Your taxable income is worked out first, and your gain is then stacked on top of it to decide which capital gains rate applies.

So the capital gains tax allowance vs personal allowance comparison isn’t really a comparison. They do separate jobs, and a large gain can push part of itself from the lower rate into the higher one without touching your personal allowance at all.

Where gains would be taxed at more than one rate, GOV.UK’s guidance is to set the allowance against the gains charged at the highest rate.

Reporting gains below the capital gains tax allowance

No tax is due if your net gains for the year come in under the allowance. Reporting is a separate question, and this is where people who owe nothing still get caught.

Do I need to report gains below the allowance? Where you already file a Self Assessment return, the trigger is what you sold for rather than what you made: cross £50,000 of proceeds across the year and the disposals belong on the return even with no tax due.

HMRC sets out the test in its guidance on working out if you need to pay, and that threshold has applied since 2023/24. Sell £60,000 of shares for a £1,000 gain and you owe nothing, but it still gets declared.

Before 2023/24 the same test used four times the allowance rather than a fixed £50,000, which is worth knowing if you’re revisiting an older year.

Losses follow their own reporting rules, and non-residents disposing of UK property or land have to tell HMRC even where the gain is below the allowance or there’s no gain at all. The guide to paying capital gains tax if moving abroad covers where that leaves people who have left the UK.

What to do before 5 April

The capital gains tax allowance covers all your disposals rather than each one, and it vanishes at the end of the tax year.

Losses come off first and brought-forward losses stop at the allowance rather than eating it. Couples cannot swap allowances but can hold assets jointly and use both. And the reporting test looks at what you sold for, not what you made.

The practical steps are to keep records of every disposal and its costs, claim losses within the four year window even in years when no tax is due, and check where you stand well before the tax year closes rather than in the last week of it.

The general capital gains tax guide covers rates, reliefs and which assets are chargeable in the first place.

Key takeaways

• The capital gains tax allowance for 2026/27 is £3,000 per person, with £1,500 for most trustees.
• It applies once across all your gains in the tax year, not separately to each asset you sell.
• Unused allowance can’t be carried forward or backdated, and lapses on 5 April.
• Losses are deducted before the allowance, and brought-forward losses are only used down to it.
• The allowance itself can’t be transferred, but jointly held assets let two people use two allowances.
• Gains under the allowance may still need reporting if total sale proceeds passed £50,000.

Common capital gains tax allowance questions

HMRC publishes detailed guidance on the annual exempt amount, and the points below cover situations its rates and allowances pages address but shorter guides tend to leave out.

Does the capital gains tax allowance apply to trusts?

Yes, but at a reduced level for most of them. HMRC’s published rates set the CGT allowance for trusts at £1,500 for 2026/27, which is half the individual figure.

There’s an exception worth knowing. Trustees acting for a disabled person use the full individual amount rather than the trustee rate, and the same full amount applies to personal representatives dealing with someone’s estate.

The trustee figure has fallen in step with the individual one. It was £6,150 in 2022/23 and £3,000 in 2023/24 before reaching its current level.

What happens to the allowance when someone dies?

Personal representatives, meaning the executor or administrator of an estate, can claim a full annual exempt amount while the estate is being wound up. That window opens at the date of death and closes once everything has reached the beneficiaries.

GOV.UK sets the limit at three tax years: the one in which the death occurred, plus the two that follow. One allowance can be claimed against gains in each of those years.

After that the entitlement stops. Gains arising during a longer administration period get no tax-free allowance at all, which is a reason not to let an estate drift.

Do non-UK residents get the capital gains tax allowance?

In most cases yes. Non-residents who dispose of UK residential property are within the charge to capital gains tax and generally receive the annual exempt amount on the same basis as UK residents.

Companies are treated differently. A company disposing of UK residential property doesn’t get the allowance, although other reliefs may be open to it.

Reporting obligations are stricter for non-residents. HMRC must be told about a disposal of UK property or land even where the gain falls below the allowance, and even where the disposal produced a loss.

Can you lose your capital gains tax allowance?

Yes, in specific circumstances. GOV.UK states that no annual exempt amount is available for a tax year in which you claim either the four-year foreign income and gains regime or Overseas Workday Relief.

This matters to new arrivals in the UK who are weighing up whether claiming that relief is worthwhile. Giving up the allowance is one of the costs to put on the other side of the scale.

The older remittance basis worked in a comparable way for non-domiciled taxpayers, and could only be claimed for tax years up to and including 2024/25.

How do you claim a capital loss without filing a tax return?

The standard route is the capital gains summary of a Self Assessment return. Not everyone files one, and HMRC’s guidance covers that situation directly.

Someone who has never made a gain and isn’t in Self Assessment can still claim, by writing to HMRC rather than filing. The four year deadline applies either way, counted from the close of the tax year in which the asset went.

Claiming matters even when it feels pointless. A reported loss sits on your record and can be set against a gain years later, whereas an unreported one is worth nothing once the window closes.