CGT Annual Allowance Explained: How the £3,000 Exemption Works

Every UK resident gets a Capital Gains Tax annual exempt amount — in 2025/26 this is £3,000. You can make gains up to this amount each tax year without paying any CGT.

What it covers

The allowance applies to gains from: shares and funds, second properties, crypto assets, business assets, and most other chargeable assets. It does not apply to gains made inside an ISA or SIPP — those are always tax-free.

Use it or lose it

The annual allowance cannot be carried forward. If you don't use it in a given tax year, it's gone. Consider crystallising gains each year up to the £3,000 limit — especially if you have a portfolio of shares.

Bed and ISA

A popular strategy: sell shares to trigger a gain within the annual allowance, then buy them back inside a Stocks & Shares ISA. Future growth is then fully sheltered from CGT.