How to Pay Less Capital Gains Tax in 2026

Capital Gains Tax (CGT) is a crucial consideration when selling assets that have increased in value. However, we know that taxes are rarely simple to understand. 

To help make sense of it all, we’ll be tackling one of the most frequently asked questions from our clients: How can I pay less Capital Gains Tax in 2026? 

In this blog, we’ll explain what the Capital Gains Tax allowance is for 2025/26, before setting out ways you can reduce your CGT bill.

Capital Gains Tax Allowance for 2025/26

For the 2025/26 tax year, individuals can make up to £3,000 in capital gains before being liable to pay Capital Gains Tax. 

This limit was established in the prior tax year and hasn’t moved for this current tax period. Similarly, the tax-free amount still works on a ‘use it or lose it’ basis, meaning you cannot carry it forward. 

If possible, spreading gains across multiple years can help make the most of this exemption.

4 Ways to Reduce Your Capital Gains Tax Bill

We know the main reason you’re here is to see how you can save some money on your Capital Gains Tax bill. 

So, before we delve into what CGT is and the rates that apply, let’s first take a look at four ways you can reduce your bill.

1. Use both partners’ allowances

If you’re married or in a civil partnership, transferring assets into joint names before selling can increase your tax-free allowance from £3,000 to £6,000. However, this must be a genuine gift, not a temporary transfer to reduce tax.

2. Plan property sales wisely

Unmarried couples can each nominate a different property as their main residence, allowing both to claim CGT relief when selling the property. Keep in mind that this only works for unmarried couples, as married couples and civil partners must choose a single primary home for tax purposes.

3. Sell possessions strategically

If you own valuable antiques, artwork, or collectables, selling items individually rather than as a set can help save money on Capital Gains Tax. This works because each item can qualify for the £6,000 tax exemption, as opposed to one bulk sale, reducing your CGT liability.

4. Live in a second property before selling

If you own a second home, living in it as your main residence before selling could qualify you for partial CGT relief, known as Private Residence Relief. You’ll need to show genuine occupation by registering utilities or updating your address on official records.

What is Capital Gains Tax?

Capital Gains Tax (CGT) is a payment owed on the sale or trade of an asset when the item is sold for a certain amount of profit. 

As such, you don’t need to pay CGT on all sales. You’re only liable to pay it when your total profit throughout the year exceeds the tax-free allowance. Additionally, only certain items are liable for CGT, including items like cryptoassets, shares in a company, paintings, or jewellery. 

It’s important to be aware of any changes to Capital Gains Tax. You can check the UK Government website ahead of filing any returns or payments to be sure you’re up to date.  

What Are the Capital Gains Tax Rates for 2026? 

Your Capital Gains Tax rate depends on two things: the type of asset sold and the total of your income which falls within the basic rate band. 

First, there are two rates to be aware of, including a basic rate and a higher rate. These rates range from 10% to 28%, depending on the asset being sold. For example, gains on carried interests are taxed at the higher rate, while gains on shares fall under the lower rate. 

To make it as simple as we can, we’ve broken it down into a handy table, which you can find below:

It’s important to note these rates apply only to the portion of your gains which exceed the annual CGT allowance.

What Profits Are Exempt from Capital Gains Tax?

Not all asset sales are liable for Capital Gains Tax payments. In fact, some key exemptions include:

• Personal assets: Selling your car (unless used for business) or personal possessions worth £6,000 or less, such as antiques and collectables. Items with a lifespan of less than 50 years, like boats, are also exempt.
• Your main home: If you sell your primary residence, CGT usually doesn’t apply. However, if you previously lived in a second home or rental property, you may qualify for partial tax relief.
• Gifts & transfers: Assets gifted to a spouse or civil partner are tax-free at the time of transfer, though CGT may apply when they later sell the asset. Gifts to charities are also exempt.
• Lottery or betting winnings: Any prize money from betting, lotteries, or football pools is tax-free.

How Does Capital Gains Tax Impact Jointly Owned Assets & Married Couples?

If you own assets jointly as a civil partnership or marriage, then both people can use their individual CGT allowance, effectively doubling the tax-free threshold. 

As such, married couples or civil partners can use their own personal CGT allowance, meaning assets which are owned jointly by each person can benefit from two allowances instead of one. To see what this looks like in practice, take a look at our table below:  

Married couples and civil partners can also transfer assets between each other without triggering CGT at the time of transfer. However, if the asset is then sold following a divorce or separation, then each person is liable for CGT on their share of the gain from the sale. 

Haggards Crowther Make Sense of Capital Gains Tax, So You Don’t Have To

Properly planning for Capital Gains Tax can feel overwhelming, especially when there are multiple sales to file for – that’s where our expert team comes in. 

Here at Haggard Crowther, we specialise in providing bespoke, chartered accounting services to both individuals and businesses alike. Whether you’re looking for guidance on CGT, planning for inheritance or just need general tax advice, our team here is for you. 

Get in touch with us today to see how we can support you. You can contact us via phone on 020 7384 0920 for our Pasons Green office or 020 7384 4898 for our Putney office. Alternatively, start a live chat anywhere on our site by clicking the ‘We Are Here!’ button. 

FAQs: Your Questions, Answered by the Experts

Do you pay CGT on shares?

Yes, you do have to pay capital gains tax on the sale of shares. However, this is only if they have increased in value and are held outside of an ISA or personal pension. Tax is only paid on the profit of the sale, not on the total transaction value. 

How do I calculate my capital gains tax? 

First, you need to know what tax band you’re in. Once you know that, just follow these three simple steps:

1. Add up the total amount of profit made on each eligible item sold. 
2. Now, minus the tax-free allowance of £3,000 from the total calculated.
3. Once you have your final figure, work out what percentage rate you need to pay based on your tax band and the type of assets sold. 

Do I pay 18% or 24% capital gains tax?

Whether you pay 18% or 24% capital gains tax depends entirely on which tax band you’re in. As such, if you’re in the basic rate, then you’ll pay 18%. For those in the higher or additional band, you’ll pay 24%. 

Terry Smith

Terry started life at HM Revenue and Customs before moving to Ashdens and then on to BDO and Chantrey Vellacott, the combination of which has provided Terry with a wide breadth of experience which has proved invaluable when helping a broad range of clients with their tax affairs.

Whether it involves meticulously organising a client’s tax affairs or leveraging his expertise to mitigate their tax exposure, Terry has a passion for delivering tangible results.