Capital Gains Tax and Carried Interest

The annual Capital Gains Tax (CGT) exemption remains at £3,000 for both the 2025/26 and 2026/27 tax years. Chargeable gains within this allowance will not give rise to a CGT liability.

The main CGT rates are as follows:

Before taking any action, it is important to consider your wider tax position and circumstances. If you are considering accelerating a disposal to take advantage of current rates, please contact us and we can help assess the potential benefits.

Carried Interest

For the 2025/26 tax year, qualifying carried interest continues to be taxed within the Capital Gains Tax regime at a rate of 32%.

However, from 6 April 2026, carried interest will move into the Income Tax regime and will also be subject to National Insurance contributions.

Qualifying carried interest will benefit from a 72.5% multiplier, meaning only 72.5% of the gain will be subject to Income Tax. For an additional rate taxpayer, this results in an effective tax rate of approximately 34.1%.

Whilst the effective rate is reduced by the multiplier, the underlying tax treatment will be based on 45% Income Tax together with 2% Class 4 National Insurance contributions.