Capital Gains Tax Rates Have Shifted: What UK Investors Need to Know
Capital gains tax rates in the UK have been restructured in two distinct stages since late 2024, pulling a broader range of investors into higher liability territory before many have had time to adjust their planning. Understanding the current schedule, and what comes next, is now a baseline requirement for anyone holding shares, funds, or other chargeable assets.
Capital Gains Tax Rates After October 2024
From 30 October 2024, the lower rate of CGT rose from 10% to 18% and the higher rate from 20% to 24%, as HSBC UK confirms. These rates apply to gains on most assets, excluding residential property, which carries its own separate schedule. HM Revenue & Customs has confirmed those same rates will remain in place from 6 April 2026: 18% for basic rate taxpayers whose gains fall within the basic Income Tax band, and 24% for higher or additional rate taxpayers.
The shift matters because the annual tax-free allowance, formally known as the ‘annual exempt amount’, has already been cut sharply in recent years. With the allowance reduced and rates now higher, investors who previously generated gains comfortably below the tax threshold are finding the arithmetic has changed.
| Taxpayer type | CGT rate before 30 Oct 2024 | CGT rate from 30 Oct 2024 | Applicable from |
|---|---|---|---|
| Basic rate taxpayer (most assets) | 10% | 18% | 30 October 2024 |
| Higher / additional rate taxpayer (most assets) | 20% | 24% | 30 October 2024 |
| BADR / Investors’ Relief | 10% (pre-6 Apr 2025) | 14% (2025-26), 18% (2026-27) | Phased from 6 April 2025 |
| Carried interest (higher rate) | 28% (30 Oct 2024 to 5 Apr 2025) | 32% | 2025-26 tax year |
Business Asset Disposal Relief and the Crypto Enforcement Push
Business Asset Disposal Relief (BADR) and Investors’ Relief (IR) are also on a tightening path, according to Ross Martin’s CGT rates summary. The preferential CGT rate on qualifying disposals stood at 10% before 6 April 2025. It moved to 14% for 2025-26 and will rise again to 18% for 2026-27. For business owners planning a sale, the window to access the lowest available rate has already closed.
Carried interest gains, the performance fees charged by private equity and hedge fund managers, attract the steepest rate of all: 32% for the 2025-26 tax year, up from 28% for the transitional period between 30 October 2024 and 5 April 2025. No equivalent carried interest rate is shown for 2026-27 in current HMRC schedules, suggesting further structural reform is in train.
Alongside the rate changes, HMRC has stepped up enforcement. During the 2024-25 tax year, the authority issued nearly 65,000 warning letters to cryptocurrency investors, a 134% increase from the prior year, according to CoinMarketCap. The cumulative total of so-called ‘nudge’ letters relating to crypto assets reached more than 100,000 between 2020 and 2025, as Professional Adviser reported. The acceleration in volume points to a systematic data-matching exercise, not a one-off campaign.
One structural quirk worth understanding: CGT receipts on most assets (excluding residential property) are typically recorded in the financial year after the gain was made, because returns are due 10 months after the end of the financial year in which a disposal occurs, as the Office for Budget Responsibility (OBR) notes. That lag means the impact of the October 2024 rate changes on HMRC’s receipts will only fully appear in the 2025-26 data, giving investors less time than the calendar might suggest before HMRC scrutinises their 2024-25 returns.
Non-residents are not exempt: those disposing of UK residential property are liable to CGT and receive the annual exempt amount on the same basis as UK residents in most cases.
The capital gains tax rates schedule is now more graduated and more punishing than at any point since the post-financial-crisis reforms. The next test is whether the 2026-27 BADR alignment at 18% prompts a rush of business disposals in the current tax year, ahead of that final step up.