When advising clients on asset disposals during the 2026/27 tax year, practitioners must apply a heavily reformed Capital Gains Tax (CGT) framework. The government has abolished the historical differential between residential property gains and other chargeable assets.
For the 2026/27 tax year, section 1H of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) sets the main CGT rates for individuals at a unified 18% for the basic rate and 24% for the higher rate. These rates apply across the board, subject only to specific reliefs like Business Asset Disposal Relief (BADR), which itself increases to an 18% rate for disposals made on or after 6 April 2026.
Table: Key 2026/27 CGT Thresholds & Rates
| Component | 2026/27 Value | Statutory Authority |
|---|---|---|
| Annual Exempt Amount (AEA) | £3,000 | s 1K TCGA 1992 |
| Basic Rate Limit | £37,700 | FA 2025 / Tax Notices |
| Personal Allowance (PA) | £12,570 | Income Tax Act 2007 |
| Basic Rate CGT | 18% | s 1H(3) TCGA 1992 |
| Higher Rate CGT | 24% | s 1H(3) TCGA 1992 |
The Computation Mechanics
Section 15 of TCGA 1992 dictates that every gain is a chargeable gain unless expressly exempted. To compute the gain, practitioners must deduct allowable expenditure from the disposal proceeds.
“Except as otherwise expressly provided, the sums allowable as a deduction from the consideration in the computation of the gain accruing to a person on the disposal of an asset shall be restricted to… the amount or value of the consideration, in money or money’s worth, given by him or on his behalf wholly and exclusively for the acquisition of the asset…”
After establishing the gross gain, section 1(3) of TCGA 1992 requires the deduction of allowable losses accruing in the same tax year. Following this, the individual deducts their Annual Exempt Amount (AEA). For 2026/27, section 1K of TCGA 1992 fixes the AEA at £3,000. The legislation strictly mandates that the AEA deduction occurs after in-year losses are applied, but before the application of any brought-forward losses from previous years.
A Basic Capital Gains Tax Calculation: A Case Study
To illustrate the practical application of the 2026/27 rules, consider the following scenario involving our client, Emma.
The Scenario:
Emma is a UK resident individual. In July 2026, she sells a portfolio of non-residential shares for £85,000. She originally acquired these shares for £30,000 and incurred £2,000 in broker fees during the acquisition and disposal. Earlier in the 2026/27 tax year, Emma realised an allowable capital loss of £5,000 on a separate asset. Emma earns a gross annual salary of £42,570.
Step 1: Compute the Chargeable Gain
First, we apply section 38 of TCGA 1992 to find the gross gain.
- Disposal Proceeds: £85,000
- Less Allowable Costs (Acquisition + Fees): £32,000
- Gross Gain: £53,000
Step 2: Apply Losses and the AEA
Next, we deduct in-year losses and the statutory AEA.
- Gross Gain: £53,000
- Less In-Year Losses: £5,000
- Net Gain: £48,000
- Less AEA (2026/27): £3,000
- Taxable Gain: £45,000
Step 3: Determine the Applicable Tax Rates
The rate of CGT depends on Emma’s available basic rate band under section 1H of TCGA 1992. For 2026/27, the Personal Allowance is £12,570, and the basic rate limit is £37,700, creating a higher rate threshold of £50,270.
- Emma’s Taxable Income: £42,570 – £12,570 = £30,000.
- Available Basic Rate Band: £37,700 – £30,000 = £7,700.
Step 4: Calculate the Final Tax Liability
The taxable gain consumes the remaining basic rate band at 18%, with the balance taxed at the higher rate of 24%.
- Basic Rate Portion: £7,700 @ 18% = £1,386
- Higher Rate Portion: £37,300 (£45,000 – £7,700) @ 24% = £8,952
- Total CGT Payable: £10,338
Consider researching the specific interaction between carried forward capital losses and the £3,000 AEA to determine the optimal timing for loss utilisation across multiple tax years.
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