The capital gains tax personal allowance for the 2025 to 2026 tax year is £3,000. Officially called the Annual Exempt Amount, it is the total profit you can make from selling assets in a tax year before Capital Gains Tax applies. The allowance resets each April and any unused portion is lost; it cannot be carried into the next year.1Legislation.gov.uk. Taxation of Chargeable Gains Act 1992, Section 1K
How the £3,000 Allowance Applies to Your Gains
The allowance is set against the total of all your chargeable gains for the year, not each sale individually. Sell shares at a £1,500 profit in June and a second property at a £2,000 profit in December, and the combined £3,500 exceeds the £3,000 threshold by £500. Tax is due on that £500, not on either gain in isolation.
If your total gains for the year stay at or below £3,000, no Capital Gains Tax is due. You may still need to report the disposal, particularly for UK residential property, but there is nothing to pay.
The figure is much lower than it used to be. It stood at £12,300 for 2022 to 2023, was cut to £6,000 for 2023 to 2024, and then halved again to £3,000 from 2024 to 2025 onwards.2GOV.UK. Capital Gains Tax Rates and Allowances If you last checked the rules a few years ago, the threshold you remember is almost certainly out of date.
Who Gets the Allowance
Every UK individual receives the full £3,000, regardless of income. There is no taper for higher earners. Spouses and civil partners each get their own allowance, so a couple holding an asset jointly can shelter up to £6,000 of combined gains between them.
Transfers between spouses or civil partners who are living together are treated as producing neither a gain nor a loss, which means an asset can be moved to whichever partner has allowance available before it is sold on.3GOV.UK. HS281 Capital Gains Tax Civil Partners and Spouses (2024) The recipient inherits the original cost basis, so tax is deferred rather than removed.
Non-UK residents disposing of UK residential property are generally entitled to the Annual Exempt Amount on the same terms as UK residents.2GOV.UK. Capital Gains Tax Rates and Allowances
Trustees and Personal Representatives
Trustees get a reduced allowance of £1,500, half the individual figure. Where the same settlor set up more than one trust after 6 June 1978, that £1,500 is split equally between them, with a floor of £300 per trust once there are more than five.4GOV.UK. Trusts and Capital Gains Tax
Personal representatives dealing with a deceased person’s estate can claim the full £3,000 for the tax year of death and the two tax years that follow.2GOV.UK. Capital Gains Tax Rates and Allowances After that, gains realised during the rest of the administration period are chargeable in full, with no allowance available.
What You Pay Above the Allowance
Once gains cross the £3,000 line, the rate depends on your income. HMRC stacks your taxable income first, and the gains sit on top. Whatever falls inside the basic rate band is taxed at 18%; anything above it is taxed at 24%.5GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances
These rates apply to all asset types disposed of from 6 April 2025, including shares and residential property. Before that date, non-property gains were taxed at 10% and 20%; the Autumn Budget 2024 aligned everything at 18% and 24%. Trustees and personal representatives pay a flat 24% above their allowance. Gains qualifying for Business Asset Disposal Relief or Investors’ Relief are taxed at 14%, and carried interest is taxed at 32%.2GOV.UK. Capital Gains Tax Rates and Allowances
How Losses Interact With the Allowance
Capital losses from the same tax year come off your gains before the allowance is applied. If losses reduce your net gain below £3,000, no tax is due. If a net gain remains, you can then bring in unused losses carried forward from earlier years, but only enough to bring the gain down to the £3,000 threshold. You do not have to use every carried-forward loss at once.6GOV.UK. Capital Gains Tax: What You Pay It On, Rates and Allowances – Losses
This asymmetry matters. The £3,000 allowance itself cannot be carried forward, so any part of it you do not use in a given year is gone. Losses, by contrast, can be carried forward indefinitely, provided you report them to HMRC within four years of the end of the tax year in which they arose. Report a loss late and it disappears. Report it on time and it sits waiting for a year when you need it.
When the Allowance Does Not Come Into It
Selling your only or main home is usually covered by Private Residence Relief, which exempts the gain entirely. If you have lived in the property as your principal residence throughout ownership, there is nothing chargeable and the Annual Exempt Amount is not touched.7GOV.UK. Tax When You Sell Your Home: Work Out Your Gain Partial relief applies where the property was your main home for only part of the ownership period, and the £3,000 allowance can then be set against the non-exempt portion of the gain.
Reporting So the Allowance Is Applied
The allowance is not automatic in the sense that HMRC quietly deducts it; you claim it by reporting your gains correctly.
For UK residential property, you must use the HMRC UK property reporting service within 60 days of completion, and pay any tax owed by the same deadline.8GOV.UK. Report and Pay Your Capital Gains Tax: If You Sold a Property in the UK on or After 6 April 2020 The clock runs from completion, not exchange. Non-residents selling UK property face the same 60-day deadline.9GOV.UK. Tell HMRC About Capital Gains Tax on UK Property or Land if Youre Not a UK Resident
For other assets, UK residents can use HMRC’s real time Capital Gains Tax service during the tax year, or report through Self Assessment after the year ends. The real time service cannot be used by trusts, estates, or for UK residential property. If you are already in Self Assessment, gains still need to appear on your annual return even if you have already used the real time service.10GOV.UK. Report and Pay Your Capital Gains Tax: If You Have Other Capital Gains to Report
Missing a filing deadline triggers an automatic £100 penalty regardless of whether tax is owed, with further penalties and interest as time passes.11HM Revenue & Customs. Compliance Checks: Penalties If You Do Not File Income Tax, Capital Gains Tax and Annual Tax on Enveloped Dwellings Returns on Time (CC/FS18a) The allowance is only useful if the paperwork actually reaches HMRC on time.