Capital Gains Tax (CGT) has become one of the most closely watched areas of UK taxation — especially for landlords, property investors, and high-net-worth individuals. With rate adjustments in recent tax years and further changes anticipated, understanding how these shifts affect your investments is more important than ever.
The CGT rate for the 2025/26 tax year sits higher than last year’s but lower than what’s expected in future years, meaning that the timing of your property sale or investment disposal could make a significant difference to your final tax bill.
For landlords planning to sell buy-to-let properties, or investors realising portfolio gains, each percentage point can affect your net return.
In this blog, we’ll explore:
How Capital Gains Tax rates have evolved year-on-year,
The reasons behind these government policy changes, and
Practical tax planning strategies that landlords and investors can use to minimise their CGT exposure.
Capital Gains Tax (CGT) is the tax you pay on the profit (or gain) made when selling or disposing of an asset that has increased in value. You’re taxed on the gain, not the total sale proceeds — meaning if you bought an asset for £300,000 and sold it for £400,000, your taxable gain would be £100,000.
You may be liable to pay CGT when you sell or gift:
Residential or commercial property (excluding your main home if it qualifies for Private Residence Relief)
Shares and investments held outside an ISA or pension
Business assets (such as goodwill or company shares)
Valuable personal possessions worth over £6,000 (e.g. artwork, antiques, or jewellery)
The basic formula is:
Sale Proceeds – (Purchase Cost + Allowable Costs + Reliefs) = Taxable Gain
Once the gain is determined:
You apply the annual CGT exemption, currently £3,000 for individuals in the 2025/26 tax year.
The remaining taxable gain is then charged at different rates depending on:
The type of asset (property, shares, business, etc.), and
Your income tax band (basic or higher rate).
When CGT Becomes Payable
For residential property, CGT must be reported and paid within 60 days of completion.
For other assets, CGT is declared and paid via your Self-Assessment tax return for the 2025/26 tax year.
Understanding these fundamentals is essential before comparing how CGT rates have evolved — and why 2025/26 marks a pivotal year for landlords and investors navigating a tightening tax regime.
Quick comparison table (individuals)
Tax year | Main CGT rates (most assets) | Residential property | BADR (Business Asset Disposal Relief) | Annual exemption (individual) | Carried interest |
2024/25 | 10% / 20% up to 29 Oct 2024; then 18% / 24% from 30 Oct 2024 | 18% / 24% | 10% (to 5 Apr 2025) | £3,000 | 18% / 28% |
2025/26 (current) | 18% / 24% | 18% / 24% | 14% | £3,000 | 32% (CGT) |
2026/27 (next) | 18% / 24% (no change announced yet) | 18% / 24% | 18% | TBC (currently £3,000 unless changed at Budget) | Moves to Income Tax regime (no longer CGT) |
Sources: HMRC/GOV.UK rate pages and Budget notes confirm the 30 Oct 2024 main-rate rise to 18%/24%, the £3,000 allowance, BADR moving 10% → 14% (6 Apr 2025) → 18% (6 Apr 2026), and carried interest set at 32% in 2025/26 then moving to the Income Tax framework from 6 Apr 2026. (GOV.UK)
2024/25 (last year)
Main CGT rates on most assets increased mid-year: from 10%/20% to 18%/24% for disposals on/after 30 Oct 2024. Residential property was already 18%/24%. Annual exemption cut to £3,000. BADR stayed 10% to year-end; carried interest was 18%/28%. (GOV.UK)
2025/26 (current year)
Main rates now 18%/24% across the board, including shares and funds (same as residential). Allowance remains £3,000. BADR on qualifying gains is 14%. Carried interest rate increased to 32% (still within CGT this year). (GOV.UK)
2026/27 (next year)
Main CGT rates currently scheduled to stay at 18%/24% unless changed at Autumn Budget 2025. BADR jumps to 18% (matching the lower main rate). Carried interest exits CGT entirely and is taxed as trading income under the new regime from 6 Apr 2026. (GOV.UK)
Editorial take for landlords & investors
If you’re comparing this year vs last year, note that pre-30 Oct 2024 disposals benefited from 10%/20% on most non-property assets; anything after that date (and all of 2025/26) faces 18%/24%. That’s why many investors accelerated disposals before the 2024 Autumn Budget change. (GOV.UK)
Looking ahead to 2026/27, the headline CGT rates are unchanged so far, but BADR rises to 18% and carried interest moves into the Income Tax net — both effectively higher than 2025/26 for affected sellers. Keep an eye on the Autumn Budget 2025 for any further main-rate moves. (GOV.UK)
Understanding CGT changes is only half the battle — the key is knowing how to plan around them. Below is a comprehensive, actionable checklist to help landlords and investors make smart, tax-efficient decisions.
A. Timing Your Disposals
✅ Review your portfolio to determine if selling before April 2026 could reduce CGT exposure, particularly if BADR applies.
✅ Avoid selling multiple high-value assets in the same tax year — stagger disposals to use exemptions efficiently.
✅ For residential properties, plan ahead for the 60-day CGT reporting deadline to avoid penalties.
B. Use Your Annual Exemption
✅ Every individual has a £3,000 exemption (2025/26) — use it annually where possible.
✅ If married or in a civil partnership, transfer ownership of an asset (if beneficial) so both partners’ allowances can be used, effectively doubling the exemption to £6,000.
C. Optimise Ownership Structure
✅ Consider holding property through a limited company or family investment company (FIC) if your portfolio is growing.
✅ For high-value assets, explore trusts or corporate wrappers for succession and tax efficiency — but seek tailored professional advice before restructuring.
D. Claim Relevant Reliefs
✅ Private Residence Relief (PRR) — for your main home or partial occupation.
✅ Lettings Relief — limited but still relevant in certain shared-occupation scenarios.
✅ Business Asset Disposal Relief (BADR) — if disposing of business interests or qualifying shares.
✅ Rollover Relief — reinvest gains into new qualifying assets to defer CGT.
E. Harvest and Offset Losses
✅ If you’ve made losses on other investments, crystallise them in the same or a future year to offset taxable gains.
✅ Keep records of all historic losses — they can often be carried forward indefinitely.
F. Leverage Tax-Efficient Investment Wrappers
✅ Use ISAs, pensions, and EIS/SEIS schemes to shelter investment growth from CGT.
✅ For investors, reinvesting through Enterprise Investment Schemes may allow CGT deferral relief while supporting innovative UK businesses.
G. Seek Professional Advice Before Selling
Every property, portfolio, or business asset carries different relief opportunities and timing implications.
Before committing to a disposal, always seek guidance from a qualified tax adviser who can:
Model CGT exposure under various sale dates,
Assess the impact of reliefs, and
Align your transactions with upcoming fiscal changes.
Naail & Co Can Help
At Naail & Co Chartered Certified Accountants & Tax Advisors, we specialise in Capital Gains Tax planning, property disposals, and investment structuring.
Whether you’re a landlord considering a sale, or an investor looking to time disposals around the 2025/26 rate changes, our experienced tax team can help you minimise exposure and maximise returns.
📞 Get in touch today to schedule a personalised CGT review and strategic tax consultation.
The last few tax years have significantly altered the Capital Gains Tax landscape for landlords. Lower annual exemptions, adjusted rates, and stricter filing deadlines mean that selling a rental property today requires far more planning than it did just a couple of years ago.
For landlords, these shifts translate directly into higher potential tax bills and tighter reporting windows — but also new opportunities to plan more intelligently.
In 2022/23, landlords enjoyed a £12,300 annual CGT allowance.
By 2024/25 it fell to £3,000, and it remains at £3,000 for 2025/26.
That means anyone selling property now can no longer shield as much of their profit from CGT.
Example:
A landlord making a £60,000 gain will now pay CGT on £57,000 (after £3,000 allowance) — previously, they’d have paid tax on only £47,700.
At the higher 24 % rate, that’s roughly £2,250 more tax than last year.
Basic-rate taxpayers continue to pay 18 % on residential property gains.
Higher-rate taxpayers pay 24 %, up from 28 % prior to 2024/25.
While this was technically a reduction from 28 %, the lower annual allowance and frozen thresholds mean more landlords are pushed into higher-rate territory, often paying more CGT overall.
All UK-resident landlords must now report and pay CGT within 60 days of completion on a property sale.
Missing this deadline triggers interest and penalties, so accurate forecasting and early professional involvement are essential.
At Naail & Co, we often see landlords caught out by completion delays or missing information — both easily avoided with advance planning.
If a property was ever your main home, you may qualify for Private Residence Relief, reducing CGT for the occupied period.
Only the final 9 months of ownership now count automatically as “deemed occupation” (previously 36 months).
Lettings Relief applies only where you lived with your tenant, making it far less common today.
These narrowing reliefs have made precise record-keeping — dates of occupation, rental periods, refurbishments — absolutely vital.
Because 2026/27 is expected to bring further tightening, landlords with plans to sell should assess whether disposing of property in 2025/26 makes more sense.
Selling before any future rise could lock in lower rates or secure current allowances.
Example – Before vs After April 2026
Scenario | Sale Date | Taxable Gain | CGT Rate | CGT Payable |
A – Sell before 5 Apr 2026 | March 2026 | £100,000 | 24 % | £24,000 |
B – Sell after 6 Apr 2026 (projected) | May 2026 | £100,000 | 26 % (possible) | £26,000 |
Difference | £2,000 more if delayed |
Even modest rate changes can materially affect the proceeds from a sale.
Some landlords have shifted toward limited-company ownership to mitigate CGT.
While companies pay Corporation Tax on gains (currently 25 %), they benefit from:
Deductible finance costs and maintenance expenses,
Potential reinvestment without personal CGT, and
More flexible succession options (e.g. share transfers).
However, company structures come with accounting, legal, and extraction-tax considerations — always seek tailored advice before incorporating.
Let’s illustrate how the numbers look in 2025/26.
Item | Amount (£) |
Sale price | 400,000 |
Purchase price | 300,000 |
Allowable costs (stamp duty, legal, refurb.) | 10,000 |
Total gain | 90,000 |
Less annual exemption | 3,000 |
Taxable gain | 87,000 |
CGT @ 24 % (higher-rate) | £20,880 due within 60 days |
Had this same property been sold pre-April 2023 (when allowance = £12,300 and rate = 28 %), the CGT would’ve been roughly £21,700 — illustrating that while the headline rate dropped, the reduced allowance keeps overall liabilities similar.
Plan ahead: obtain a pre-sale CGT estimate and completion-ready paperwork. Split ownership: transfer shares to a spouse or partner to use both exemptions. Time your refurbishments: deductible improvement costs can legitimately reduce taxable gains. Coordinate with your accountant: ensure capital losses, reliefs, and mortgage interest are used effectively. Don’t miss the 60-day window: appoint your accountant early to file promptly via HMRC’s Property Reporting Service.
Key takeaway
For landlords, CGT is no longer a passive afterthought — it’s a core element of disposal strategy. The 2025/26 tax year offers a short-term planning window before potential tightening in 2026/27. By combining accurate timing, record-keeping, and specialist advice, landlords can still extract strong post-tax value from their investments.
The Capital Gains Tax (CGT) changes across recent and upcoming tax years don’t just affect landlords — they also carry major implications for individual investors, shareholders, and fund holders.
While property owners face the 60-day rule and residential rates, investors must now navigate reduced exemptions, tightening reliefs, and a shifting balance between capital gains and income returns.
The most immediate impact is the shrinking annual exemption — still £3,000 for 2025/26, down from £12,300 just a few years ago.
For investors with modest portfolios, this change has brought many into the CGT net for the first time.
Even small disposals of shares or crypto assets can now trigger reportable gains.
Example:
An investor sells shares for a £7,000 gain.
Under 2022/23 rules (£12,300 exemption), no CGT was due.
Under 2025/26 rules (£3,000 exemption), £4,000 becomes taxable, resulting in £800 of CGT at the 20% rate.
For most share and fund investments:
Basic-rate taxpayers pay 10% CGT.
Higher/additional-rate taxpayers pay 20% CGT.
Although these rates haven’t increased, the real effect of the reduced exemption means more investors are now paying CGT where they previously didn’t — effectively broadening the taxable base.
Since gains are only taxed when realised, timing matters.
Smart investors plan disposals strategically — spreading sales over tax years to make full use of each annual exemption.
✅ Sell part of your holding before 5 April 2026 and the rest after 6 April 2026, to benefit from two separate £3,000 allowances.
✅ If one spouse is a basic-rate taxpayer, consider transferring investments before selling to achieve a lower overall rate.
Investors can offset realised capital losses against gains to reduce taxable profits.
Report any losses to HMRC via Self Assessment.
Unused losses can be carried forward indefinitely to future years.
Example:
If you made a £12,000 gain and a £5,000 loss in the same year:
Only £7,000 is taxable (minus your annual exemption).
Strategically harvesting losses near year-end can help minimise CGT exposure.
One of the simplest ways to avoid CGT altogether is to invest through tax-efficient wrappers such as:
ISAs (Individual Savings Accounts):
All gains and income are completely CGT-free.
The ISA allowance remains £20,000 per year for 2025/26.
Pensions (SIPP, Workplace, etc.):
Investments grow free of CGT and income tax, with relief on contributions.
EIS / SEIS Investments:
Qualifying investments offer CGT deferral relief, loss relief, and tax-free growth if held for at least 3 years.
By allocating part of your portfolio to these wrappers, you can legally eliminate CGT liability on significant investment growth.
If you own shares in your own trading company or a business interest, you may qualify for Business Asset Disposal Relief (BADR).
The rate is 14% for 2025/26, rising to 18% in 2026/27.
A lifetime limit of £1 million in qualifying gains still applies.
Timing your business sale or share disposal before April 2026 could therefore save 4% CGT — translating into £40,000 saved per £1 million of gain.
While the main 10% and 20% CGT rates for investors remain stable, the 2026/27 shift brings two important developments:
BADR rises to 18%, narrowing the gap with standard rates.
Carried interest (for fund managers and private equity investors) moves from 32% CGT to full Income Tax rates, potentially exceeding 45%.
Even if these don’t apply to you directly, they indicate a clear policy direction towards aligning CGT with income tax, which could affect wider investment strategies in the future.
Scenario | Asset Type | Gain (£) | CGT Rate | CGT Due |
Before 2023/24 | Shares | 10,000 | 10% / 20% | £0 (below £12,300 exemption) |
2025/26 | Shares | 10,000 | 10% / 20% | £1,400 (after £3,000 exemption) |
2026/27 (if BADR applies) | Business shares | 100,000 | 18% | £18,000 (up from £14,000 in 2025/26) |
The shrinking allowance and incremental rate rises highlight why investors should plan disposals carefully, rather than waiting until after April 2026.
✅ Use your £3,000 CGT allowance before year-end.
✅ Crystallise losses before 5 April 2026 to offset future gains.
✅ Split disposals between spouses or across tax years.
✅ Prioritise ISAs, pensions, and EIS investments for long-term growth.
✅ Review your portfolio annually with a qualified tax adviser to anticipate policy changes early.
CGT is no longer a concern only for property sellers — investors, too, are facing a tighter tax environment.
Even if rates appear stable, the reduced exemptions and phased policy shifts can erode net investment returns.
By planning disposals, utilising tax wrappers, and aligning strategies with fiscal calendars, investors can legally reduce their CGT exposure and safeguard portfolio performance.
As CGT rates evolve and exemptions shrink, strategic timing and structure are now the most powerful tools to preserve your wealth. Whether you’re a landlord selling property or an investor managing a portfolio, the right moves — made before the end of the 2025/26 tax year — can significantly reduce your Capital Gains Tax liability.
Here are proven, actionable strategies to help you plan effectively.
CGT is triggered when an asset is disposed of, not when it was purchased or agreed to sell.
That means timing your transaction can directly affect the rate you pay.
Smart move:
Sell one asset before 5 April 2026 and another after 6 April 2026 to use two separate £3,000 allowances.
This can save up to £1,200 in CGT (at 20% rate) simply by splitting disposals across tax years.
For landlords, if market conditions allow, completing a sale before 5 April 2026 may lock in lower effective rates before potential 2026/27 adjustments.
If you’re married or in a civil partnership, you can transfer assets between spouses tax-free before selling.
This allows you to:
Use two sets of CGT allowances (£6,000 total), and
Possibly lower the overall tax rate if one spouse is in a lower income tax band.
Example:
A higher-rate taxpayer transfers half ownership of a property to their spouse, a basic-rate taxpayer.
On sale, part of the gain is taxed at 18% instead of 24%, saving several thousand pounds.
If you’ve made losses on any other investments, report them to HMRC and carry them forward to offset future gains.
This is especially useful for investors with fluctuating portfolios or property owners with underperforming assets.
Losses can be claimed up to 4 years after the end of the tax year they occurred.
Example:
A £10,000 loss realised in 2024/25 could offset a £10,000 gain made in 2025/26 — saving £2,000 in CGT at the higher rate.
a. Business Asset Disposal Relief (BADR)
Available to business owners or shareholders disposing of qualifying assets.
Rate: 14% in 2025/26, increasing to 18% in 2026/27.
Consider completing eligible disposals before April 2026 to lock in the lower rate.
b. Private Residence Relief (PRR)
If part of your property was your main home, PRR can exempt the gain on the occupied portion.
Keep accurate dates of occupation and letting to support your claim.
c. Rollover or Holdover Relief
If reinvesting proceeds into another qualifying business asset, you may defer CGT altogether.
Particularly useful for business owners or investors expanding portfolios.
Investing through ISAs, SIPPs, or EIS/SEIS remains one of the most effective long-term CGT strategies:
ISAs: All gains are completely CGT-free (up to £20,000 annual limit).
Pensions: Growth inside a pension is CGT-free, with potential income tax relief on contributions.
EIS/SEIS: Offer deferral relief and CGT-free growth if conditions are met.
These wrappers are essential for anyone regularly realising gains — especially investors transitioning from property to equities or funds.
For landlords with multiple buy-to-let properties:
Transferring assets to a limited company can offer long-term CGT and IHT planning benefits.
Companies pay Corporation Tax (25%) on gains instead of personal CGT.
Gains remain within the company until extracted, allowing reinvestment with no immediate tax charge.
However, incorporation is complex — it may trigger Stamp Duty and CGT implications unless certain reliefs apply. Always obtain professional guidance first.
Because CGT rate bands depend on your income tax bracket, managing taxable income can indirectly lower your CGT:
Increase pension contributions to reduce taxable income.
Delay bonuses or dividends to stay in the basic-rate band (10% or 18% CGT).
Transfer interest-bearing or dividend-producing assets to a lower-earning spouse.
A modest reduction in taxable income could mean a 6% reduction in CGT rate on your gains.
CGT planning ties closely with Inheritance Tax (IHT).
Assets passed on at death are revalued to market value (no CGT on death), but may incur IHT.
Transferring assets into trusts or family investment companies can balance both CGT and IHT objectives.
This is especially important for landlords planning intergenerational wealth transfer.
Good record-keeping is essential for proving cost bases and eligible deductions.
Retain:
Purchase and sale contracts,
Solicitor and estate agent invoices,
Improvement and refurbishment receipts,
Dates of ownership and occupancy.
Accurate documentation can legitimately reduce your taxable gain — and protect you in case of HMRC queries.
Every transaction is unique — and one misjudged sale can lead to unnecessary tax exposure.
A professional adviser can:
Model your CGT liability across multiple scenarios,
Identify reliefs and deferral options, and
Strategically align disposals with upcoming policy and rate changes.
At Naail & Co Chartered Certified Accountants & Tax Advisors, we specialise in:
CGT planning for landlords and investors
Property sale and portfolio restructuring
Business disposals and BADR claims
Tax-efficient investment structuring
Our experienced team can help you time your sales, structure your assets, and minimise your CGT burden before 2026/27.
📞 Contact us today for a tailored CGT planning consultation — and make the most of the current tax window while it lasts.
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