What is the capital gains tax annual exempt amount?
Answered 11 March 2026
What the law says
The CGT annual exempt amount (AEA) is governed by section 1K of the Taxation of Chargeable Gains Act 1992 (TCGA 1992).
Current amount
The current annual exempt amount is £3,000. This figure was set by the Finance (No. 2) Act 2023, which amended s.1K(2) TCGA 1992 — first reducing the AEA from £12,300 to £6,000 for 2023-24, then to £3,000 for 2024-25 and subsequent tax years.
How it works
- The AEA is deducted from an individual's chargeable gains for the tax year, but only so far as necessary to eliminate them.
- Order of deductions: The AEA is applied after deducting allowable losses accruing in the current tax year, but before deducting losses carried forward from a previous tax year.
- The AEA may be allocated across gains in whatever way is most beneficial to the taxpayer, regardless of the rate at which those gains would otherwise be charged.
Who is entitled
- Individuals: entitled to the full AEA, subject to the exclusions below.
- Personal representatives: entitled to the AEA for the tax year of death and the following two tax years.
- Trustees: the AEA applies in accordance with Schedule 1C TCGA 1992 (which provides a reduced amount for most trusts).
Who is not entitled
An individual loses entitlement to the AEA for a tax year if:
- They claim the remittance basis under s.809B ITA 2007; or
- They make a foreign gain claim, foreign income claim, or foreign employment election for that year.
CPI indexation abolished
Section 1L TCGA 1992 (which previously provided for annual CPI uplifts to the AEA) has been repealed with effect from 2023-24 onwards, so the £3,000 figure is fixed unless Parliament legislates otherwise.
Historical context (for reference)
| Tax year | AEA |
|---|---|
| 2020-21 to 2022-23 | £12,300 |
| 2023-24 | £6,000 |
| 2024-25 onwards | £3,000 |
HMRC guidance / practice
HMRC confirms that an individual who makes a foreign income claim, foreign gain claim, or overseas workday relief (OWR) election will lose entitlement to the CGT AEA for that tax year, regardless of whether the claim relates only to income, only to gains, or only to OWR. The loss of the AEA applies in addition to the loss of foreign qualifying losses.
Citation sources
Capital gains tax Annual exempt amount 8 1 Chapter 1 of Part 1 of the Taxation of Chargeable Gains Act 1992 (capital gains tax) is amended as follows. 2 In section 1K (annual exempt amount), in subsection (2) (which specifies the amount of the annual exempt amount for a tax year), for “£12,300” substitute “£6,000” . 3 The amendment made by subsection (2) has effect for the tax year 2023-24. 4 In section 1K(2) (as amended by subsection (2) ), for “£6,000” substitute “£3,000” . 5 The amendment mad
Part 1 Capital gains tax and corporation tax on chargeable gains Chapter 1 Capital gains tax Annual exempt amount Annual exempt amount 1K 1 If an individual is (or, apart from this section, would be) chargeable to capital gains tax for a tax year on chargeable gains, the annual exempt amount for the year is to be deducted from those gains (but no further than necessary to eliminate them). 2 The annual exempt amount for a tax year is £3,000 . 3 . . . . . . . . . . . . . . . . . . . . . . . . . .
Sections 1K(6)(b) and 16(4) TCGA 1992 An individual who makes a foreign income claim, a foreign gain claim or an OWR election for a tax year will lose entitlement to the following: the CGT annual exempt amount for the tax year in relation to which the claim is made (see section 1K(6)(b) TCGA 1992) foreign qualifying losses that accrue to the individual in the tax year in relation to which the claim is made, which cease to be allowable losses (see section 16(4) TCGA 1992) The loss of the AEA and