Spousal Transfers
Married couples and civil partners can transfer assets between themselves at no gain/no loss. This allows both partners to use their £3,000 annual exemptions and potentially different tax rates.
Capital Gains Tax (CGT)
Capital gains tax rates have increased significantly, while the annual exemption remains at just £3,000. Smart planning can help minimize your tax bill through timing, spousal transfers, and using available reliefs.
For 2025/26, individuals are entitled to an annual CGT exemption of £3,000 and trustees up to £1,500.
The main rates of Capital Gains Tax increased from 10% and 20% to 18% and 24% respectively for disposals made on or after 30 October 2025.
This information is for guidance only and does not constitute financial advice.
Capital gain tax planning
When selling investments costs more than expected, capital gains tax has become much more expensive since rates increased and the annual exemption dropped from £12,300 to just £3,000. Many investors are caught off guard by large tax bills when selling shares, property, or other assets. Proper planning can help you time disposals and use available reliefs effectively.
Types of capital gains tax rates and reliefs available
- Main rates of 18% for basic rate taxpayers and 24% for higher rate taxpayers
- Residential property rates remain at 18% and 24% depending on your income level
- Business Asset Disposal Relief at 14% rising to 18% from April 2026
- Investors' Relief at 14% rising to 18% from April 2026
- Annual exemption of £3,000 per person that cannot be carried forward
- Spousal transfers at no gain/no loss to maximize both annual exemptions
From 30 October 2024, main CGT rates increased to 18% for basic rate taxpayers and 24% for higher rate taxpayers. Your rate depends on your total income including the capital gain.
Each person gets £3,000 tax-free capital gains per year. This exemption cannot be carried forward, so it's important to use it each year where possible through careful timing of disposals.
Previously called Entrepreneurs' Relief, this provides a reduced rate of 14% (rising to 18% from April 2026) on qualifying business disposals, subject to a lifetime limit of £1 million.
Strategic timing of asset disposals can help spread gains across tax years to make best use of annual exemptions and potentially keep you in lower tax bands.
Common capital gains tax planning strategies
Offsetting Losses
Capital losses can be offset against gains in the same year or carried forward indefinitely. Consider realizing losses to reduce your overall tax bill on profitable disposals.
Timing Disposals
Spread large gains across multiple tax years to make use of annual exemptions. Consider selling some assets before the tax year end and others after to optimize your position.
ISA and Pension Planning
Consider reinvesting proceeds into ISAs or pensions where future growth is tax-free. This is particularly valuable given the reduced annual exemptions and higher tax rates.
HM Revenue and Customs practice and the law relating to taxation are complex and subject to individual circumstances and changes which cannot be foreseen.
An ISA is a medium to long term investment, which aims to increase the value of the money you invest for growth or income or both. The value of your investments and any income from them can fall as well as rise. You may not get back the amount you invested.
For specialist tax advice, please refer to an accountant or tax specialist.
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