Your capital gains tax allowance for 2026 to 2027
Every tax year you can realise £3,000 of gains before capital gains tax touches you. That is the annual exempt amount for 2026 to 2027, per GOV.UK, and if it sounds small, your memory is not wrong. It stood at £12,300 as recently as the 2022 to 2023 tax year, then was cut to £6,000, then halved again. A shrinking allowance pulled hundreds of thousands of ordinary investors into a tax that used to belong to the wealthy.
On what needs reporting above and below the allowance, LITRG sets out the thresholds independently.
Since the number is now small enough to matter, using it properly matters too. Trusts get £1,500.
The rules that decide whether you keep it
It resets every 6 April and does not carry forward. Unused allowance from last year is gone. That single fact drives most of the planning around it, because two disposals split across 5 April and 6 April can use two allowances, £6,000 of tax-free gains, where the same disposals a week apart inside one year use one.
It is one allowance across everything. Shares, crypto, a second property, a valuable painting, all share the same £3,000. People who track their crypto and their share portfolio separately routinely double-count it, and the return corrects them expensively.
It comes off after losses. Current-year losses reduce your gains first, then the allowance applies to what is left, then carried-forward losses only as far as needed to bring you down to the allowance. The ordering is friendlier than people assume, since it stops carried losses being wasted on gains the allowance would have covered anyway. How losses work, and the deadline for claiming old ones, is a subject of its own we cover in the losses guide.
Married couples get double, properly used
Transfers between spouses and civil partners carry no capital gains tax, the recipient inherits the original cost. Which means a couple has £6,000 of allowance and two sets of rate bands between them, and moving half an asset to the lower-earning partner before a sale is among the oldest legitimate planning there is. The transfer has to be genuine, an outright gift, and it needs doing before the disposal rather than after, but there is nothing aggressive about it. The same mechanism is why gifting crypto to a spouse works and gifting it to anyone else is a taxable disposal.
The reporting trap above £50,000
Staying under the allowance does not always mean staying off the return. If you file Self Assessment and your total proceeds, the sale amounts, not the gains, exceed £50,000, you report anyway, even with no tax due. Active traders hit this constantly, sell £60,000 of holdings for a £2,000 gain and the gain is covered by the allowance while the reporting duty stands. For crypto, where a year of swaps can produce startling gross proceeds, this rule catches almost everyone who trades at all, and every swap counts as a disposal, as our crypto gains guide explains.
What sits outside the allowance entirely
Some things never need it. Gains inside ISAs and pensions are not taxable at all. Your own car, and most personal possessions sold for under £6,000, are exempt under the chattels rules. Your main home is usually covered by Private Residence Relief. Gilts are exempt. The allowance is for what is left, which these days mostly means shares outside wrappers, crypto, and property beyond your own home.
Questions on the allowance
Do I pay tax if my gains are under £3,000?
No tax. You may still have to report if you are in Self Assessment and proceeds exceeded £50,000, and property has its own 60 day reporting rule regardless.
Can I carry unused allowance forward?
No. It expires each 5 April, which is exactly why timing disposals around the year end is worth doing.
Do my spouse and I each get £3,000?
Yes, and no-gain transfers between you mean the allowances and rate bands can be used where they do the most good, provided the gift is real and made before the sale.
Does the allowance apply to crypto?
Fully. Crypto disposals are capital gains like any other asset’s, and the same single £3,000 covers them together with everything else you sold that year.
A £3,000 allowance rewards precision. Whether your gains this year sit above or below it depends on cost basis calculations that are usually less settled than they look, and checking them is what our free review is for. Running the numbers first through our capital gains tax calculator takes thirty seconds.
