Capital Gains Tax Guide — US & UK 2026
Capital gains tax (CGT) is one of the most searched tax topics — and one of the most misunderstood. Whether you sold stocks during a market rally, disposed of crypto at a profit, or sold a second property, understanding how capital gains are taxed before you sell can save you thousands. This guide covers US and UK CGT rules for 2026, including the rates that changed in late 2024, the NIIT, and the strategies investors use to minimise their tax bill legally.
🇺🇸 US long-term CGT: 0% / 15% / 20% (+ 3.8% NIIT for high earners)
🇺🇸 US short-term CGT: same as ordinary income (10%–37%)
🇬🇧 UK CGT on shares/crypto: 18% (basic rate) / 24% (higher rate) — updated Oct 2024
🇬🇧 UK CGT annual exempt amount: £3,000 for 2025/26
🇬🇧 UK residential property: 18% (basic) / 24% (higher) — updated Oct 2024
US Capital Gains Tax Rates 2026
The US taxes capital gains differently depending on how long you held the asset. Short-term gains (assets held one year or less) are taxed as ordinary income — the same rate as your wages. Long-term gains (assets held more than one year) qualify for preferential rates of 0%, 15%, or 20%.
| Filing Status | 0% Rate (up to) | 15% Rate (up to) | 20% Rate (above) |
|---|---|---|---|
| Single | ~$48,350 | ~$533,400 | >$533,400 |
| Married Filing Jointly | ~$96,700 | ~$600,050 | >$600,050 |
| Head of Household | ~$64,750 | ~$566,700 | >$566,700 |
These thresholds are inflation-adjusted annually. Use them as planning guidance — your exact rate depends on your total taxable income after deductions.
The Net Investment Income Tax (NIIT) — 3.8% Surtax
High-income US taxpayers face an additional 3.8% Net Investment Income Tax on capital gains and other investment income. The NIIT applies when your modified adjusted gross income (MAGI) exceeds $200,000 (single) or $250,000 (married filing jointly) — thresholds that have not been inflation-adjusted since 2013, meaning more taxpayers are caught each year.
The NIIT applies to the lesser of: (a) your net investment income, or (b) the amount your MAGI exceeds the threshold. So a single filer with $220,000 MAGI and $30,000 in capital gains would owe NIIT on the lesser of $30,000 (NII) or $20,000 (amount above threshold) = 3.8% × $20,000 = $760.
US Short-Term Capital Gains — The Hidden Cost of Impatience
Selling an asset after only a few months can dramatically increase your tax bill. A taxpayer in the 32% federal bracket who sells a stock at a $10,000 gain within 12 months owes $3,200 in federal tax. If they had waited until the one-year mark, the same gain at 15% long-term rate would cost $1,500 — a saving of $1,700 simply by waiting. State taxes apply on top in most states.
Purchase: $5,000 (100 shares at $50) | Sale: $8,000 (100 shares at $80)
Gain: $3,000 | Broker fees: $25 | Taxable gain: $2,975
Short-term (22% federal + 5% state): $2,975 × 27% = $803 tax, $7,172 net
Long-term (15% federal + 5% state): $2,975 × 20% = $595 tax, $7,380 net
Long-term + NIIT check: if above threshold, add 3.8% × $2,975 = $113 more
UK CGT — Rates Updated October 2024
The UK government raised CGT rates on shares, crypto and most other assets in the Autumn Budget 2024 (effective 30 October 2024). The rates now are:
- Shares, crypto, funds and other assets: 18% (basic rate) / 24% (higher/additional rate)
- Residential property: 18% (basic rate) / 24% (higher/additional rate)
- Business Asset Disposal Relief (BADR): 14% (from April 2025), rising to 18% (from April 2026) — for qualifying business disposals
The annual exempt amount (AEA) remains at £3,000 for 2025/26, down from £12,300 just three years ago. This means many more taxpayers who previously fell entirely within the exempt amount will now have a CGT liability.
Total gains: £18,000 | Annual exempt amount: £3,000 | Broker fees: £200
Capital losses this year: £1,500
Taxable gain: £18,000 − £1,500 (losses) − £200 (fees) = £16,300 − £3,000 (AEA) = £13,300
CGT at 24% (higher rate): £13,300 × 0.24 = £3,192
Net gain after CGT: £18,000 − £3,192 − £200 = £14,608
UK CGT on Crypto — HMRC Rules 2026
HMRC classifies cryptocurrency as a capital asset, not currency. Every disposal — including selling for fiat, exchanging one crypto for another, spending crypto, or giving it away (except to a spouse) — is a taxable event. UK investors must report gains using HMRC's share identification rules:
- Same-day rule: disposals matched with acquisitions on the same day first
- 30-day rule (bed and breakfasting): disposals matched with acquisitions in the next 30 days
- Section 104 pool: remaining shares averaged across all other acquisitions
These rules prevent "bed and breakfasting" — selling to crystallise a loss and immediately rebuying. Keep detailed records of every crypto transaction including date, amount in GBP at time of transaction, and any fees paid.
Strategies to Reduce Capital Gains Tax Legally
- US — Tax-loss harvesting: Sell investments at a loss to offset gains. Net capital losses up to $3,000 per year can also offset ordinary income; excess carries forward indefinitely. Watch the 30-day wash sale rule — do not repurchase the same or substantially identical security within 30 days.
- US — Use tax-advantaged accounts: Gains inside an ISA equivalent (Roth IRA, 401k) are not subject to CGT. Long-term, maximising these accounts is the most powerful CGT avoidance strategy.
- UK — Bed and ISA: Sell assets outside an ISA and immediately repurchase them inside an ISA. Future gains within the ISA are tax-free. The proceeds are subject to CGT on sale but future growth is sheltered.
- UK — Use the annual exempt amount every year: The £3,000 AEA cannot be carried forward. Consider realising up to £3,000 of gains each tax year even if you are reinvesting — this resets your cost basis and uses the exemption.
- Both — Transfer assets between spouses: Transfers between spouses/civil partners are CGT-free. Each partner can then use their own annual exempt amount and potentially a lower tax rate on disposal.
- Both — Time your disposals: If your income will be lower next year (career break, retirement), delaying a disposal into the lower-income year can reduce the applicable rate.
Related Calculators
- Investment Calculator — project how an investment grows before considering tax.
- Compound Interest Calculator — model compounding returns over time.
- Take-Home Pay Calculator — estimate income tax separately from CGT.
- ROI Calculator — calculate return on investment before and after tax.
- Percentage Calculator — quick gain/loss percentage checks.
Frequently Asked Questions
1) What are US long-term capital gains tax rates for 2026?
0%, 15%, or 20% depending on taxable income and filing status. Single filers: 0% up to ~$48,350; 15% up to ~$533,400; 20% above that. High earners may additionally owe the 3.8% NIIT. Short-term gains (≤ 1 year) are taxed as ordinary income at rates from 10% to 37%.
2) What are UK CGT rates for shares and crypto in 2026?
From 30 October 2024: basic rate taxpayers pay 18%; higher/additional rate taxpayers pay 24%. These rates apply to shares, crypto, funds and most other assets. The same 18%/24% structure now applies to residential property too (previously 18%/28%). The annual exempt amount is £3,000 for 2025/26.
3) What is the Net Investment Income Tax (NIIT)?
A US 3.8% federal surtax on investment income (including capital gains) for earners above $200,000 (single) or $250,000 (married filing jointly). It applies to the lesser of your net investment income or the amount your MAGI exceeds the threshold. Toggle it on in the calculator if applicable to you.
4) How is crypto taxed in the US and UK?
In both countries, crypto is treated as a capital asset. Every disposal (sale, swap, spend) is a taxable event. US: short/long-term rates apply depending on holding period. UK: same CGT rates as shares (18%/24% from Oct 2024) apply, with HMRC's same-day, 30-day, and Section 104 pool identification rules.
5) Can capital losses offset capital gains?
Yes — in both the US and UK. US: losses offset gains of the same type first, then cross types; net losses up to $3,000/year offset ordinary income; excess carries forward. UK: current-year losses are offset before the AEA; unused losses carry forward indefinitely. Enter current-year losses in the UK section to see the impact on your estimate.
6) What expenses reduce a capital gain?
US: broker commissions on purchase and sale, transfer taxes, certain other transaction costs. UK: acquisition costs, broker fees, stamp duty, legal fees, enhancement expenditure (capital improvements), and disposal costs. Enter deductible fees in the Fees/Deductions field for a more accurate estimate.
7) Is this calculator accurate for tax filing?
No — it is a simplified planning estimator. Real tax depends on filing status, total income, available loss carryforwards, wash sale rules (US), HMRC share identification rules and basis calculations (UK), and many other factors. Always confirm with the IRS, HMRC, or a qualified tax adviser before filing a return.
8) What is the UK "bed and ISA" strategy?
Selling an asset outside an ISA and immediately repurchasing it inside an ISA. The sale crystallises a CGT event (offset by your AEA if available), but all future gains and income inside the ISA are tax-free. It is one of the most effective legal CGT reduction strategies available to UK investors.
9) Do states tax capital gains in the US?
Most states tax capital gains as ordinary income at state rates, typically 3–13%. Nine states have no state income tax (AK, FL, NV, NH, SD, TN, TX, WA, WY) — so no state CGT. California is notable for taxing all capital gains as ordinary income at up to 13.3%. Enter your state's rate in the State Tax field for a complete estimate.