UK Capital Gains Tax: Probability Assessment 2026-2027
UK CGT rates rose from 10%/20% to 18%/24% in the October 2024 Budget. BADR increases to 18% in April 2026. Carried interest moves to income tax. With fiscal pressures mounting, we model the probability of further increases and their portfolio impact.
Probability
38%
Timeframe
Oct 2026 - Apr 2027
Confidence
Medium
Sources
5 verified
UK capital gains tax rates increased substantially in the October 2024 Budget - from 10%/20% to 18%/24% for most assets. Business Asset Disposal Relief rises to 18% in April 2026. Carried interest moves to income tax treatment. With fiscal pressures mounting and the non-dom regime abolished, this assessment models the probability of further CGT increases through 2027 and their portfolio impact.
What's confirmed: the current landscape
UK CGT rate timeline
| Date | Basic rate | Higher rate | BADR | Annual exempt |
|---|---|---|---|---|
| Pre-Oct 2024 | 10% | 20% | 10% | GBP 6,000 |
| Oct 2024 | 18% | 24% | 10% | GBP 3,000 |
| Apr 2025 | 18% | 24% | 14% | GBP 3,000 |
| Apr 2026 | 18% | 24% | 18% | GBP 3,000 |
Source: HMRC, GOV.UK, Office for Budget Responsibility. Data confirmed as of March 2026.
The trajectory is clear: every CGT-related change in the past 18 months has moved rates upward. The annual exempt amount halved from GBP 6,000 to GBP 3,000. BADR is rising from 10% to 18% in two steps. Carried interest is being moved to income tax entirely. The Investors' Relief lifetime limit was cut to GBP 1 million.
From April 2025, the non-dom remittance basis was abolished. New arrivals get a 4-year exemption, after which worldwide gains are taxable. This is the most significant change for internationally mobile UHNWI - it removes the primary mechanism that shielded foreign gains from UK CGT.
Probability assessment: what comes next
The question isn't whether the government wants higher CGT - the October 2024 Budget made that clear. It's whether fiscal pressures force another increase before the next general election, and if so, how far rates go.
If: No further CGT changes through 2027 general election
Then: Current 18%/24% rates become the new baseline; investors adjust planning around existing rates
If: Autumn Budget 2026 aligns CGT with income tax rates (20%/40%/45%)
Then: Immediate crystallisation wave; offshore and property reallocation accelerates; Mediterranean property demand from UK investors rises 15-22%
If: Incremental increase: higher rate CGT rises to 28-30%
Then: Moderate behavioural response; lock-in effect strengthens for existing equity holders; property becomes relatively more attractive
Portfolio implications
Asset class impact by CGT scenario
| Asset | No change | +4-6pp increase | Full alignment |
|---|---|---|---|
| UK equities | Neutral | Lock-in deepens | Significant lock-in |
| UK residential property | Neutral | Unchanged (already 24%) | Rises to 45% |
| Overseas property | Relatively attractive | More attractive | Significantly attractive |
| ISA/pension wrappers | Valuable | More valuable | Critical |
| Crypto | 24% on gains | 28-30% on gains | Up to 45% on gains |
Data sources
- HMRC Capital Gains Tax rates of tax - GOV.UK, March 2026
- Autumn Budget 2024 - HM Treasury, October 2024
- Office for Budget Responsibility - CGT receipts forecast, March 2026
- House of Commons Library - Capital gains tax: recent developments
- Futuratty scenario model - incorporating fiscal headroom analysis, March 2026
Frequently asked questions
What are the UK capital gains tax rates in 2026?
As of April 2026, the main CGT rates are 18% for basic rate taxpayers and 24% for higher/additional rate taxpayers. Residential property rates remain at 18% and 24%. The annual exempt amount is frozen at GBP 3,000. Business Asset Disposal Relief (BADR) increases to 18% from 14% in April 2026, up from the original 10%.
What CGT changes happened in the October 2024 Autumn Budget?
The October 2024 Budget increased the lower rate of CGT from 10% to 18% and the higher rate from 20% to 24% for most assets. Residential property rates were unchanged. Investors' Relief lifetime limit was cut to GBP 1 million. Carried interest will move to income tax treatment from April 2026 at 72.5% of the equivalent income tax plus NI rate.
Will capital gains tax rates increase further in 2026 or 2027?
Futuratty estimates a 38% probability of further CGT increases in the next Autumn Budget, with the most likely scenario being an alignment of all CGT rates with income tax rates (up to 45%). The government has stated no further rate changes are planned for April 2026 beyond the BADR increase, but fiscal pressures and the carried interest precedent suggest the door remains open.
How does the UK non-dom regime change affect capital gains tax?
From April 2025, the remittance basis was abolished and replaced with a residence-based system. New arrivals get a 4-year exemption on foreign income and gains. After that, worldwide gains are subject to UK CGT. This significantly increases CGT exposure for internationally mobile UHNWI who previously used remittance basis planning.
What is the impact of CGT changes on property investors?
Residential property CGT rates were not increased in the October 2024 Budget (already at 18%/24%). However, the BADR increase to 18% affects business property disposals. The bigger impact is on portfolio rebalancing: investors selling equities or alternative assets to fund property purchases now face higher CGT on disposal, creating a lock-in effect.
Should investors crystallise gains before further CGT increases?
This depends on the probability and timing of further increases versus the cost of premature disposal. With Futuratty estimating 38% probability of further increases, the expected value of early crystallisation depends on your marginal rate, asset mix, and time horizon. This is not financial advice - consult a qualified tax professional.
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