Capital Gains Tax (CGT) Rates
CGT rates increased from 30 October 2024 (Autumn Budget). The new rates apply for 2025/26 and 2026/27:
| Gain Type | Basic Rate Taxpayer | Higher/Additional Rate |
|---|---|---|
| Most assets (residential property excluded) | 18% | 24% |
| Residential property | 18% | 24% |
| Business Asset Disposal Relief (BADR) | 14% from 6 April 2025 → 18% from 6 April 2026 | |
| Investors’ Relief | 14% from 6 April 2025 → 18% from 6 April 2026 | |
Annual CGT Exempt Amount
- 2025/26 & 2026/27: £3,000 per individual
- Trusts: £1,500
Business Asset Disposal Relief (BADR)
The BADR lifetime limit remains at £1 million. However, the tax rate increased:
- 10% before 30 October 2024
- 14% from 6 April 2025
- 18% from 6 April 2026
Taxpayers who were planning to sell a qualifying business should take advice on timing.
Inheritance Tax (IHT) — Key Changes
| Allowance | Amount |
|---|---|
| Nil Rate Band | £325,000 (frozen until April 2030) |
| Residence Nil Rate Band | £175,000 (frozen until April 2030) |
| Effective threshold (with RNRB, married couple) | Up to £1,000,000 |
| IHT rate above threshold | 40% (36% if 10%+ left to charity) |
Agricultural & Business Property Relief — April 2026 Change
From 6 April 2026:
- 100% relief for Agricultural Property Relief (APR) and Business Property Relief (BPR) will be capped at £2.5 million combined per individual (£5 million for spouses/civil partners)
- Assets above the cap will receive 50% relief only
- AIM shares: Reduced to 50% relief (flat) across their entire value
Action required: Business owners and farmers should review estate planning before April 2026 to mitigate the impact of these changes.
Pensions and IHT — April 2027
From 6 April 2027, most unused pension funds and death benefits will be brought into the estate for IHT purposes. This is a major change affecting retirement planning — contact us to review your position now.
