The CGT regime for UK residential property in 2026/27 sits at 18% basic rate and 24% higher rate with a £3,000 annual exempt amount and 60-day reporting via HMRC's online service. That much is confirmed and operating. What's less clear is what happens beyond 2026/27. The confirmed April 2027 change for property landlords is the new separate income tax rates of 22/42/47% on rental income, not a CGT rate change. Speculation about further CGT rate changes has circulated but is not in legislation as of May 2026.
This guide separates what is confirmed from what is speculation, explains how the confirmed April 2027 income tax change affects CGT planning indirectly, and sets out the planning levers that make sense regardless of which scenario plays out. We have separate pages on the 2027 property income tax rates in detail and the broader CGT on UK property complete guide if you need depth on those specific topics.
What's Confirmed for Residential Property CGT in 2026/27
Operating now and unchanged for the 2026/27 tax year:
| Item | 2026/27 figure |
|---|---|
| Residential property CGT, basic rate | 18% |
| Residential property CGT, higher rate | 24% |
| Non-residential / commercial CGT, basic rate | 18% |
| Non-residential / commercial CGT, higher rate | 24% |
| Annual exempt amount (individuals) | £3,000 |
| Annual exempt amount (trusts) | £1,500 |
| Reporting and payment window for UK residential property | 60 days from completion |
| Reporting mechanism | HMRC's Capital Gains Tax on UK property service |
HMRC's Capital Gains Manual is the authoritative reference for the mechanics. For the current legislative basis, TCGA 1992 sets out the framework.
What's Confirmed for April 2027
The single confirmed April 2027 change for property landlords is the new separate property income tax rates:
- Basic rate property income tax: 22% (up from 20% general income tax)
- Higher rate property income tax: 42% (up from 40%)
- Additional rate property income tax: 47% (up from 45%)
These rates apply to rental income (rental profit, after allowable expenses but with Section 24 still operating) for individual landlords from 6 April 2027. They were announced in the Autumn Budget and are scheduled for inclusion in Finance Act 2026.
Critically, these are income tax rates, not CGT rates. The headline figure most landlords focus on (the rate at which they pay tax on disposal gains) does not change as a confirmed matter from 6 April 2027. No CGT rate change for residential property has been laid in legislation for that date as at May 2026.
What Is and Isn't Confirmed for CGT in April 2027
Treat the following table as the current best read of what is on the statute book versus what has been floated but not legislated. Subject to any fiscal events between this article's date and 6 April 2027.
| Possible change | Status (May 2026) |
|---|---|
| CGT residential basic-rate increase from 18% | Speculated, not in legislation |
| CGT residential higher-rate increase from 24% | Speculated, not in legislation |
| Annual exempt amount further reduction below £3,000 | Speculated, not in legislation |
| CGT alignment with income tax rates | Floated in policy circles, not in legislation |
| Reintroduction of taper relief or holding-period discounts | Discussed, not in legislation |
| Separate property income tax rates (22/42/47%) on rental income | Confirmed for 6 April 2027 |
| 60-day CGT reporting requirement | Continues unchanged |
The position can change at any fiscal event. Spring Statements and Autumn Budgets between May 2026 and April 2027 may add to the confirmed list. Plan on what is confirmed, but build flexibility for scenarios that are floated but not yet legislated.
How the Confirmed April 2027 Income Tax Change Affects CGT Planning
Even though the income tax change does not directly alter CGT, it changes the calculus around the personal-vs-limited-company decision, which in turn changes CGT planning.
For a higher-rate landlord, the 2-percentage-point rate increase on rental income (from 40% to 42%) makes the limited company route relatively more attractive. Corporation tax inside a company sits at 19% (under £50k profit) or 25% (over £250k), with marginal relief between. The widening gap between personal property income tax and corporation tax pulls more landlords toward incorporation.
Once incorporation enters the picture, CGT planning shifts because:
- Transferring property into a company triggers CGT at market value unless incorporation relief under TCGA 1992 s.162 applies. The relief defers (does not eliminate) the CGT charge, requiring transfer of the whole property business as a going concern in exchange for shares.
- Once inside the company, gains are taxed as part of corporation tax at 19/25%, not personal CGT at 18/24%. The company has no annual exempt amount equivalent to the £3,000 personal allowance.
- Extracting gains from the company creates a second tax layer via dividends (8.75% / 33.75% / 39.35%) or salary. The double-layer issue is the main argument against companies for landlords who plan to sell and extract proceeds quickly.
The net effect: April 2027 strengthens the case for company ownership for many higher-rate landlords, which in turn elevates the importance of getting the incorporation CGT analysis right.
Planning Levers That Work Regardless of 2027 CGT Scenario
The following moves make sense under the current regime AND under most plausible 2027 scenarios. They are the planning baseline that doesn't depend on guessing what the Chancellor does next.
Use the £3,000 annual exempt amount every year
The exemption is use-it-or-lose-it. Landlords planning multiple disposals should spread them across tax years to use the exemption each year, rather than bundling disposals into a single tax year where only one exemption applies.
Spouse transfers before disposal
Transfers between spouses or civil partners are at no-gain-no-loss for CGT. Moving a half-share to a lower-band spouse before sale uses both annual exempt amounts and both basic-rate bands. For property held in joint names with unequal beneficial ownership intended, a Form 17 election with HMRC formalises the position.
Match disposals to low-income years
The 18% basic-rate band on CGT is determined by where the gain falls in your income stack. A disposal in a year of low employment income (sabbatical, reduced hours, retirement transition) may stay inside the basic-rate band, where higher-rate income would have pushed it into the 24% band.
Plan the 60-day reporting before completion
The 60-day window for reporting and paying CGT on UK residential disposals is tight. Solicitor and accountant coordination before exchange (not after completion) ensures the return goes in on time and any reliefs are properly claimed. Late filing penalties start at £100 and escalate; late payment interest also applies.
Document base cost carefully
Capital improvements add to base cost and reduce the eventual gain. Many landlords lose deductions because the records of refurbishment, extensions, or material capital works are incomplete. Keep invoices, receipts, planning consents, and contractor agreements for every capital project, indefinitely, until disposal.
Consider Principal Private Residence Relief carefully
If a property has at any point been your only or main residence, PPR may apply to a portion of the gain. Final period exemption (9 months) and letting relief (now limited but still available in some cases) interact in complex ways. PPR planning before disposal is usually higher-value than PPR claims after disposal.
What If a CGT Rate Increase Does Happen in April 2027?
Plan as a scenario, not a certainty. The moves that would help if a rate increase landed:
- Accelerate disposals you would have made within 2-3 years anyway. Bringing forward a planned sale by 6-12 months has a defined cost (transaction costs, possible market timing risk). Bringing it forward by 5 years usually does not.
- Crystallise gains via spousal transfer or PPR election timing. Some gains can be "banked" at current rates through structural moves rather than full disposals.
- Review the incorporation decision again post-announcement. If a CGT rate rise is confirmed, the cost of transferring property into a company increases proportionally, which can flip the case for some landlords.
The moves that do NOT help if a rate increase lands:
- Fire-sale disposals you would not otherwise make. The tax saving rarely outweighs the lost rental income, transaction costs, and possible price compromise.
- Pre-emptive gifting to family members. Triggers immediate CGT at current rates (not avoided by giving rather than selling) and creates IHT consequences via the seven-year rule.
Related reading: CGT on UK property complete guide, 2027 property income tax rates in detail, How 2027 income tax rates affect CGT planning, BTL limited company complete guide, Section 24 complete guide, and Current CGT rates explained for 2026/27.