Kirk Rice Blog

Exploring Potential Ways to Reduce Your Capital Gains Tax (CGT) LiabilityWritten on June 22, 2026 by Alex Moody

Key points on CGT for 2026:

• Capital Gains Tax applies to profits made on the sale or transfer of certain assets, including property that is not your main residence, shares held outside an ISA, and higher-value personal possessions.
• For the 2025/26 and 2026/27 tax years, the CGT annual exempt amount is £3,000, with tax rates applying based on the type of asset and the individual’s tax position.
• Reliefs and allowances, such as transfers between spouses or civil partners, may be used in CGT planning where the relevant conditions are met.
• Tax-efficient structures and reliefs, including ISAs, EIS, SEIS, and holdover relief, could influence how gains are taxed or deferred, subject to personal circumstances and wider tax considerations.

There have recently been changes to both the CGT allowances and rates, so staying informed of the changing landscape and understanding the ways in which a CGT liability could potentially be reduced is as important as ever. 

Below, we provide a basic overview of CGT, the current allowances and rates, and some possible strategies for reducing your CGT liability. 

What is CGT and who needs to pay it?

CGT applies to profits from selling certain assets, such as personal possessions worth £6,000 or more, shares not held in an ISA, and residential properties that are not your main residence. While these examples form the core of CGT declarations, there are other applicable scenarios as well. 

If an asset’s value increases from the time of purchase to the time of sale, the profit is generally subject to CGT. However, if your total gains are below the annual tax-free allowance, you may not owe any CGT. There are various reliefs available, such as disposing of the asset as a gift to your spouse or civil partner, which is not subject to CGT. 

What are the CGT allowances and rates?

For the 2025/26 and 2026/27 tax years, the tax-free allowance for CGT (the Annual Exempt Amount) is £3,000. This annual allowance figures apply to individuals, personal representatives, and trustees for disabled people. A lower allowance of £1,500 applies to other trustees for these years. 

The CGT rates have also seen significant changes. The table below outlines the rates for the 2025/26 and 2026/27 tax years: 

*Since 6 April 2026, carried interest gains has been taxed as trading profits subject to Income Tax. 

Ways to reduce exposure to CGT liability 

There are strategies you can employ to minimize your tax liabilities and potentially reduce your exposure to CGT. Informed tax planning is key. Some examples are: 

Transferring assets between spouses or civil partners 

Transfers of assets between married couples and civil partners are not subject to tax as they are treated as being made on a no-gain / no-loss basis. The recipient takes on the original base cost of the asset, meaning any future gain will be calculated with reference to this cost and the market value at the date the recipient disposes of the asset. By doing this, couples can utilize both individuals’ tax-free allowances, effectively doubling their threshold before CGT applies. This approach requires careful tax planning to ensure compliance with tax laws. 

Tax-efficient investments (ISAs, EIS, & SEIS) 

Investing in tax-efficient options like Individual Savings Accounts (ISAs), the Enterprise Investment Scheme (EIS), or the Seed Enterprise Investment Scheme (SEIS) can offer tax savings. Some of these schemes can provide CGT deferral or exemption, potentially reducing exposure to capital gains tax. It is important to seek professional financial advice before making any investment decisions to ensure they align with your financial goals and that you are aware of the associated risks. 

Holdover (gift) relief 

Holdover relief can defer CGT when assets are gifted. This relief applies to qualifying business and agricultural property, as well as potentially other assets transferred into UK resident relevant property trusts. It is crucial to seek professional advice due to the complexity and specific restrictions of the relief, including inheritance tax implications. 

Kirk Rice’s Capital Gains Tax specialists are here to help

With changes now in place and more people being brought into the scope of CGT, it is crucial to seek professional advice where you anticipate selling or transferring assets. 

Our tax specialists are on hand to advise you. We aim to make sure you pay the right amount of tax and make savings where possible. Get in touch with us today at info@kirkrice.co.uk.  

Please note: This article is correct as at the publication date. The answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. The information is based on current tax legislation which may change in future. Information is based on our current understanding of taxation legislation and regulations. Any levels and bases of relief from taxation are subject to change. The Financial Conduct Authority does not regulate tax planning.