Capital Gains Tax can become a major cash-flow issue when a business owner sells shares or business assets, or when a landlord disposes of a buy-to-let property. The final amount depends on the asset, the size and timing of the gain, the owner’s taxable income, available losses and whether a relief genuinely applies. This KKB Accounting guide reflects the published rules for the 2026/27 tax year as checked on 11 August 2026.
1. CGT rates and allowances for 2026/27
For 2026/27, the Annual Exempt Amount is £3,000 for an individual and £1,500 for most trustees. It is an allowance against net chargeable gains, not against the sale proceeds. A person who sells an asset for £200,000 therefore does not calculate CGT on £197,000: the acquisition cost, allowable disposal costs, qualifying enhancement expenditure and allowable capital losses must be considered before the exemption is applied.
For individuals, the main CGT rates are 18% and 24%. The part of a taxable gain that fits within the person’s unused basic-rate Income Tax band is generally charged at 18%; the balance is generally charged at 24%. This means a business owner or landlord needs an estimate of both taxable income and taxable gains for the year before the likely CGT bill can be calculated properly.
Married couples and civil partners each have their own Annual Exempt Amount. Transfers between them are generally made on a no-gain, no-loss basis while they are living together, but that does not erase the gain: the recipient normally takes over the transferor’s CGT base cost. Ownership must be genuine, and advice should be taken before a disposal becomes contractually fixed.
2. What business owners should check before a disposal
Selling a trading business, shares in a personal company or assets used by the business can produce very different CGT outcomes. The transaction should be reviewed before heads of terms or a sale agreement remove the practical planning options.
Business Asset Disposal Relief
Business Asset Disposal Relief, formerly Entrepreneurs’ Relief, can reduce the rate on qualifying gains. For qualifying disposals made on or after 6 April 2026, the BADR rate is 18%. The lifetime limit remains £1 million of qualifying gains. The detailed conditions depend on what is being sold, but an individual selling shares in a personal trading company will commonly need to have been an officer or employee and to have met the relevant shareholding and voting-right tests throughout the qualifying period. A two-year qualifying period commonly applies.
BADR is not automatic and the £1 million figure is a lifetime limit, so earlier claims matter. Evidence such as share registers, employment or office-holder records, trading-status information and the disposal timeline should be checked before the claim is made.
Investors’ Relief, EIS and SEIS
Investors’ Relief can apply to certain shares in unlisted trading companies where the investor satisfies the detailed conditions. For qualifying disposals from 6 April 2026, the rate is 18%, the lifetime limit is £1 million and the shares will ordinarily need to have been held for at least three years.
EIS shares are not simply “CGT-free after three years”. Disposal relief generally depends on the shares remaining qualifying shares, being held for the relevant period, and Income Tax relief having been obtained and not withdrawn. EIS can also offer CGT deferral relief under separate rules, so the original gain and the later disposal need to be tracked carefully.
SEIS reinvestment relief can exempt 50% of a qualifying gain that is reinvested in eligible SEIS shares, subject to the scheme conditions and time limits. With the current £200,000 annual SEIS investment limit, the maximum potential reinvestment exemption is £100,000. The investment paperwork and the timing of both the gain and the share subscription are important.
3. What landlords should know about property disposals
A UK-resident individual disposing of a residential investment property is generally within the same 18% and 24% CGT rate structure. Private Residence Relief may reduce a gain where a property has genuinely been the owner’s only or main residence, but it does not automatically shelter an entire gain merely because the owner lived there at some point. Occupation periods, absences, nominations, letting history and the final period of ownership can all affect the result.
Where CGT is due on a UK residential property disposal, a UK Property Disposal Return and payment are generally required within 60 days of completion. The disposal may also need to appear on the Self Assessment return for the tax year. Waiting for the normal January filing deadline can therefore create a late report, interest and possible penalties.
Before completion, gather the purchase statement, legal and agent invoices, Stamp Duty Land Tax evidence, sale statement and invoices for capital improvements. Day-to-day repairs and maintenance are not automatically enhancement expenditure, so invoices should identify what work was carried out rather than simply showing a total payment.
4. Practical planning before a sale
Planning should be driven by the real transaction and completed before binding commitments are made. Useful checks can include:
- Model the whole tax year. Estimate taxable income, gains, losses and the available basic-rate band rather than applying one CGT rate to the entire gain.
- Review genuine spousal ownership. A no-gain, no-loss transfer may allow both partners’ allowances and tax bands to be used, but beneficial ownership and the inherited base cost must be documented.
- Claim allowable losses. Current-year capital losses are normally set against gains before the Annual Exempt Amount, while unused claimed losses may be carried forward under the normal rules.
- Check whether timing is still flexible. Separate disposals in different tax years may use more than one Annual Exempt Amount, but the contract date normally determines the tax year and commercial reality must come first.
- Consider pension contributions in the wider plan. A qualifying personal contribution can sometimes extend the basic-rate band used in the CGT calculation, but it does not guarantee that every gain will be taxed at 18%.
- Test relief conditions with evidence. BADR, Investors’ Relief, EIS and SEIS each have detailed statutory requirements; a label on an investment or company is not enough.
5. Information to assemble for a CGT review
A useful first review starts with the proposed completion date, expected sale value, original acquisition records, improvement and disposal costs, ownership history, current-year taxable income, earlier capital losses and any previous lifetime-relief claims. Business disposals also need the company structure, share history, trading activities and the seller’s role in the company.
KKB Accounting can help organise the figures, identify the questions that need answering and prepare the relevant tax reporting from the information supplied. Relief eligibility and transaction structuring should be reviewed before contracts are signed. To discuss an upcoming sale, use the KKB Accounting contact page or read more about tax return support.
Frequently asked questions
How much is the CGT allowance in 2026/27?
The Annual Exempt Amount is £3,000 for an individual and £1,500 for most trustees. It applies to net chargeable gains, not to the gross proceeds received on a sale.
How long do landlords have to report a taxable UK residential property sale?
A UK-resident individual who has CGT to pay on a UK residential property disposal will generally need to report and pay within 60 days of completion, and may also need to include the disposal on Self Assessment.
Is Business Asset Disposal Relief still available in 2026?
Yes, but only where the qualifying conditions are met. Qualifying disposals made on or after 6 April 2026 are charged at 18% and count towards the £1 million lifetime limit.
Official sources and important note
- GOV.UK: Capital Gains Tax rates and allowances
- GOV.UK: Business Asset Disposal Relief
- GOV.UK: Reporting and paying Capital Gains Tax
- GOV.UK: EIS and Capital Gains Tax helpsheet 2026
- GOV.UK: SEIS tax reliefs helpsheet 2026
Rates and thresholds checked against published GOV.UK and HMRC guidance on 11 August 2026. This article provides general information only and is not personalised tax, legal or investment advice. Tax treatment depends on individual circumstances and rules can change.
