Capital Gains Tax – why more people are paying it and how to prepare

24th June 2026

Capital Gains Tax: Why More People Are Paying CGT

For years, Capital Gains Tax (CGT) was often seen as a tax that mainly affected wealthy investors; today, this is no longer the case.

Recent changes to allowances and tax rates mean more people are finding themselves liable for CGT, including retirees, small-scale investors and buy-to-let landlords. If you’re planning to sell shares, a rental property, valuable jewellery, antiques or other investments, it’s worth understanding the rules before you proceed.

Why are more people paying Capital Gains Tax?

The biggest change has been the reduction in the Annual Exempt Amount – the tax-free allowance for capital gains.

Only a few years ago, you could make gains of up to £12,300 before CGT became payable. Today, that allowance has fallen to just £3,000 per person.

As a result, gains that would previously have fallen comfortably within the tax-free limit may now result in a tax bill.

From 6 April 2026, CGT rates were simplified and unified. Basic‑rate taxpayers now pay 18% on gains that fall within the basic‑rate band and 24% on gains above it. Higher‑ and additional‑rate taxpayers pay 24% on all taxable gains. These rates apply to most assets, including shares, funds, second homes and buy‑to‑let properties. The previous 10% and 20% rates have been removed, and residential property no longer has a separate higher rate.

What assets could be affected?

You may need to pay CGT if you sell assets for more than you originally paid and your gains exceed the annual allowance.

Common examples include:

Shares and investment funds held outside an ISA or pension.
Buy-to-let properties and holiday lets.
Second homes.
Valuable jewellery, antiques, artwork and collectibles.
Gold bullion and certain gold products.

Your main residence is usually exempt from Capital Gains Tax.

Importantly, CGT is charged on the profit you make, not the total sale value.

Why retirees are being caught out

Many retirees rely on investments built up over decades to supplement their income. Selling shares or funds to fund retirement plans can now trigger CGT more easily because of the lower allowance.

If you’ve held investments for many years, even relatively modest sales can generate gains that exceed the £3,000 threshold. This makes it increasingly important to consider the tax implications before making withdrawals or restructuring your portfolio.

What about landlords?

Buy-to-let landlords face particular challenges. Many rental properties have risen substantially in value over the past decade. If you decide to sell, the gain could be significant, potentially resulting in a sizeable tax bill.

While this shouldn’t necessarily prevent you from selling, understanding the likely tax consequences beforehand can help you make more informed decisions and avoid unexpected surprises.

Practical ways to reduce your liability

Although CGT can’t always be avoided, there are legitimate ways to reduce the amount you pay.

You may wish to:

Make full use of ISA and pension allowances, where gains can grow free from CGT.
Consider transferring assets to a spouse or civil partner – such transfers are generally exempt from CGT.
Offset eligible capital losses against gains.
Keep detailed records of purchase costs, improvement expenses and professional fees, particularly when selling property.
Consider spreading disposals across different tax years where appropriate.

Planning ahead matters

The most important thing is: don’t assume that Capital Gains Tax only affects wealthy individuals.

Whether you’re selling long-held shares, cashing in assets during retirement or exiting the buy-to-let market, the rules now affect a much broader range of people. Speaking to a reputable accountant will help you understand the implications before you sell and avoid an unexpected tax bill.