US Capital Gains Tax Rates 2027: Selling UK Shares or Property

The US capital gains tax rates 2027 stay at 0%, 15% and 20%, and the 2027 bands have now been published. A married couple filing jointly pays 0% on long-term gains up to $102,100 of taxable income, 15% up to $633,600 and 20% above that. Americans in the UK report the same sale to HMRC as well, and the UK tax then becomes a credit on Form 1116.

That is the short answer. The rest of this guide covers what each return actually shows when a US citizen or dual national living in Britain sells a UK share portfolio or a UK second property in 2027. It sets out the figures the IRS published in Rev. Proc. 2026-35, the UK rates we could confirm on GOV.UK, how a sterling gain turns into a different dollar gain, and why a February sale and a May sale fall into different UK tax years. A full worked example follows. At Jungle Tax we prepare both returns for clients in this position every year, and the points below are the ones that most often get missed.

What are the US capital gains tax rates for 2027?

Long-term gains on assets held for more than a year are taxed at 0%, 15% or 20% in 2027. Which rate applies depends on taxable income including the gain, measured against bands that Rev. Proc. 2026-35 sets for each filing status. Short-term gains are taxed as ordinary income, at up to 37%.

The IRS issued Rev. Proc. 2026-35 on 5 November 2026. Section 3.03 lists the "maximum zero rate amount" and "maximum 15 percent rate amount" for tax years beginning in 2027. We read these figures directly from the IRS document:

Filing status (2027)	0% rate applies up to	15% rate applies up to	20% rate applies above
Married filing jointly and surviving spouse	$102,100	$633,600	$633,600
Married filing separately	$51,050	$316,800	$316,800
Head of household	$68,350	$598,400	$598,400
Single (all other individuals)	$51,050	$563,200	$563,200

For comparison, the 2026 joint return figures under Rev. Proc. 2025-32 were $98,900 and $613,700, so the 2027 bands are a modest inflation step up rather than a structural change. The same revenue procedure sets the 2027 joint standard deduction at $33,200 and starts the 37% ordinary bracket at $793,650 for joint filers.

How the bands work in practice

The bands are thresholds of total taxable income, not of the gain alone. Ordinary income fills the lower part of the scale first and the long-term gain sits on top. A London executive whose salary already pushes joint taxable income past $102,100 will find no part of a large gain qualifies for 0%. For most of the readers we act for, the real question is how much of the gain lands in the 15% slice before the 20% rate starts.

Two narrower rates sit outside the 0/15/20 structure. Unrecaptured section 1250 gain, the portion of a property gain reflecting depreciation allowed on a former rental, is capped at 25%. Gains on collectibles are capped at 28%. Neither is new for 2027.

Does the 3.8% Net Investment Income Tax apply to a UK sale?

Yes, in most cases. The 3.8% Net Investment Income Tax applies to gains from UK shares and UK investment property once modified adjusted gross income exceeds $250,000 on a joint return, $200,000 for single filers and $125,000 if married filing separately. These thresholds are set in the statute and are not indexed, so they do not move with Rev. Proc. 2026-35.

The difficulty for Americans in Britain is that UK tax generally cannot be credited against NIIT, so the 3.8% often survives even when the foreign tax credit wipes out the regular US tax. We cover the reasons and the arguments in detail in our guide to NIIT for US-UK dual filers. For preparation purposes, assume Form 8960 will show a liability on any sizeable 2027 disposal and plan the cash accordingly. The IRS summary is on its Net Investment Income Tax page.

What UK capital gains tax rates apply in 2027?

On the GOV.UK rates page we checked on 14 November 2026, gains made from 6 April 2026 are taxed at 18% within the basic rate band and 24% above it, for shares and residential property alike. The annual exempt amount is £3,000. We could not find 2027/28 rates published on GOV.UK.

That last point matters because a 2027 calendar-year sale can fall in either of two UK tax years. A sale between 1 January and 5 April 2027 belongs to 2026/27, and the figures above are confirmed on the official GOV.UK Capital Gains Tax rates page. A sale on or after 6 April 2027 belongs to 2027/28. Several commentators report that the 28 October 2026 Budget left the main rates and the £3,000 exemption unchanged for 2027/28. We have not been able to confirm that on a GOV.UK or HMRC page, so treat it as unverified until HMRC publishes its rates.

Business Asset Disposal Relief carries an 18% rate from 6 April 2026 on qualifying business disposals. It rarely applies to a portfolio of listed shares held by an employee investor, and it does not apply to a second home.

Why is my dollar gain different from my sterling gain?

Because the IRS measures everything in US dollars. Cost is converted at the exchange rate when the asset was bought, proceeds at the rate when it was sold. If sterling moved in between, the dollar gain can be larger or smaller than the sterling gain HMRC sees, and occasionally one return shows a gain while the other shows a loss.

HMRC computes the gain wholly in sterling: proceeds less allowable cost, less incidental costs of acquisition and sale. The US calculation on Form 8949 is built from different inputs. Each purchase lot carries its own dollar basis at its own historic rate, and the sale proceeds are translated at the spot rate for the sale. Brokers in the UK do not issue Form 1099-B, so the dollar figures have to be reconstructed from contract notes and a defensible rate source applied consistently.

Share identification is not the same in each country

This is the detail generalist guides almost never mention. UK rules match a disposal first with shares bought the same day, then with shares bought in the following 30 days, and only then with the section 104 pool, which carries an averaged sterling cost. US rules look at the specific lots sold, or first-in first-out where lots are not identified. For a portfolio built up over years with regular top-ups, the two returns can therefore use different cost figures for the same sale even before currency enters the picture. Both are correct. They should not be forced to agree.

UK property and the mortgage

A UK second property sold in 2027 follows the same principle: dollar basis at historic rates, dollar proceeds at the completion date rate. Where the property was ever your main home, or where a sterling mortgage is repaid on sale, there are further US consequences. We deal with those separately in Americans selling UK property: the US capital gains tax trap, so they are not repeated here.

Does a February 2027 sale differ from a May 2027 sale?

Yes. The US year runs January to December; the UK year runs 6 April to 5 April. A February 2027 sale is reported on the US 2027 return and the UK 2026/27 return. A May 2027 sale is reported on the same US 2027 return but on the UK 2027/28 return, with UK tax due a year later.

Here is how the deadlines line up for a share sale, assuming UK Self Assessment is filed online:

• Shares sold 18 February 2027: UK tax year 2026/27. UK return and payment due 31 January 2028. US 2027 return due 15 April 2028, extended automatically to 15 June 2028 for taxpayers living abroad, and to 15 October 2028 on Form 4868. The UK figure is final before the US return is filed.
• Shares sold 20 May 2027: UK tax year 2027/28. UK return and payment due 31 January 2029. The US 2027 return is due in 2028, before the UK tax is even computed on a filed return.
• UK residential property sold in either month: a UK resident must report and pay any CGT due within 60 days of completion through HMRC's report and pay service, and then include the disposal on the Self Assessment return for that year.

Our 2027 US-UK dual filing calendar sets out every date on both sides of the Atlantic.

Which US year does the UK credit belong to?

The timing gap matters because the credit has to reach the year that holds the gain. Form 1116 asks whether you claim foreign taxes when paid or when accrued, and that choice drives the answer. Under the accrual method, a UK tax generally accrues at the close of the UK tax year it relates to. Tax on a February 2027 sale therefore accrues on 5 April 2027 and sits naturally on the 2027 US return. Tax on a May 2027 sale accrues on 5 April 2028, which places it in the 2028 US year; the one-year carryback in section 904(c) is how that credit gets back to the 2027 gain, usually through an amended return.

Under the paid method the position for shares is worse: UK tax paid in January 2029 falls two US years after the sale, beyond the reach of a one-year carryback. Residential property is the reverse case, because the 60-day payment normally lands in the same calendar year as the sale. Once chosen, the accrual method binds later years. This is a reporting decision with long consequences, and it should be made deliberately on the first return where it matters, not by default.

How does Form 1116 handle UK capital gains tax?

UK CGT on shares or an investment property is a creditable income tax, reported on Form 1116 in the passive category. The credit is capped at the US tax on that category, worked out after a rate adjustment that scales gains taxed at 15% or 20% down before the fraction is applied. Unused UK tax carries back one year and forward ten.

The detail is set out in the IRS instructions for Form 1116. Three points come up repeatedly on UK sales.

• Source of the gain. A US citizen's gain on selling shares is normally US-source. Section 865(g) treats it as foreign-source where the seller has a tax home outside the United States and the foreign country taxes the gain at an effective rate of at least 10%. UK CGT at 18% or 24% usually meets that test. A gain sheltered by the £3,000 exemption, or otherwise untaxed in the UK, may not. Gain on UK land is foreign-source because of where the land is.
• The capital gain rate adjustment. Because long-term gains are taxed at preferential rates, Form 1116 multiplies foreign-source gains in the 15% band by 0.4054 and in the 20% band by 0.5405, in the numerator and in worldwide taxable income. The result is that the passive limitation is often lower than the US tax you might expect the gain to carry.
• Baskets do not mix. Excess UK income tax on salary sits in the general category and cannot be moved into the passive category to cover a gain. Our guide to foreign tax credit baskets and carryovers covers how surpluses are tracked from year to year.

Worked example: a London couple sells a UK share portfolio in 2027

Emma and Daniel are both US citizens, resident in London, and file a joint 2027 US return. Emma is a UK additional rate taxpayer with a salary of £400,000. In March 2019 she bought a single holding of UK-listed company shares, held in her own name in an ordinary general investment account (not an ISA, and not funds), for £600,000. She sells the whole holding on 18 February 2027 for £1,000,000. Daniel has no income. The couple use the accrual method on Form 1116.

For illustration we use $1.31 to the pound at purchase and $1.35 at sale, and we translate UK taxes at $1.35 as well. In a real file, accrued foreign taxes are generally translated at the average rate for the year, and actual spot rates would be sourced for each date. Figures are rounded and AMT is ignored.

The UK return (2026/27)

• Sterling gain: £1,000,000 less £600,000 = £400,000
• Less annual exempt amount: £3,000, leaving £397,000
• Taxed at 24% because Emma's salary uses her basic rate band: UK CGT of £95,280, about $128,628
• Reported on the capital gains pages (SA108) of her 2026/27 return; paid by 31 January 2028

The US return (2027)

• Dollar cost: £600,000 × 1.31 = $786,000. Dollar proceeds: £1,000,000 × 1.35 = $1,350,000
• Long-term gain on Form 8949 and Schedule D: $564,000. Note that £400,000 at the sale rate is only $540,000; the extra $24,000 is the currency movement on the original investment, and it appears on the US return alone
• Salary $540,000 less the $33,200 standard deduction gives ordinary taxable income of $506,800, taxed at $113,562 on the 2027 joint schedule
• The gain stacks on top. $126,800 fills the 15% band up to $633,600 ($19,020) and the remaining $437,200 is taxed at 20% ($87,440): regular US tax on the gain of $106,460
• NIIT on Form 8960: 3.8% of $564,000 = $21,432

Before any credit, the sale adds $127,892 of US tax ($106,460 regular plus $21,432 NIIT), on top of the UK bill.

Applying the foreign tax credit

Total regular US tax for the year is $220,022. After the rate adjustment the gain counts as $287,711 in the fraction, against adjusted worldwide taxable income of $794,511. That produces a passive limitation of about $79,675, well below both the UK CGT of $128,628 and the $106,460 of US tax on the gain. On those numbers alone, $26,785 of US tax on the gain would be left uncovered.

The general category changes the picture. Emma's salary carries roughly £166,000 (about $224,000) of UK income tax against a general limitation of about $140,347. Because both baskets have more foreign tax than limitation, the total credit equals the whole $220,022 of regular US tax.

Line	Before FTC	After FTC
Regular US tax on the gain	$106,460	$0
Net Investment Income Tax	$21,432	$21,432
Total US tax from the sale	$127,892	$21,432
UK CGT (2026/27)	£95,280 / $128,628	£95,280 / $128,628
Passive credit carried to other years	n/a	about $48,953

Two lessons come out of this. First, the NIIT is the US cost that survives, and it is payable with the 2027 return. Second, the regular tax reached nil only because Emma's salary produced a general-category surplus. A client with little UK-taxed earned income, or one excluding salary under the foreign earned income exclusion, could see a residual regular tax bill on the same sale. Had the shares been sold in May 2027 instead, the UK tax would sit in 2027/28 and the credit would need the carryback route described above.

US and UK treatment side by side

Issue	US (IRS) return	UK (HMRC) return
Basis of taxing you	Citizenship: worldwide gains	Residence: worldwide gains for UK residents
Tax year	1 January to 31 December 2027	6 April to 5 April (2026/27 or 2027/28)
Rates on a 2027 sale	0%, 15%, 20% long-term; up to 37% short-term; plus 3.8% NIIT	18% / 24% confirmed from 6 April 2026; 2027/28 not yet confirmed on GOV.UK
Holding period	More than one year for long-term rates	No distinction
Annual allowance	None; the 0% band depends on total taxable income	£3,000 annual exempt amount (2026/27)
Currency	US dollars at historic and sale-date rates	Sterling throughout
Share identification	Specific lots or first-in first-out	Same day, 30-day rule, then section 104 pool
ISA wrapper	Not recognised; gains are taxable	Gains inside an ISA exempt
Where it is reported	Form 8949, Schedule D, Form 1116 (passive), Form 8960	SA108; 60-day property return for residential land
Payment	With the return, from 15 April 2028 (interest runs from then)	31 January after the tax year; 60 days for UK residential property
Capital losses	$3,000 a year against ordinary income ($1,500 separately), rest carried forward	Set against gains; carried forward if claimed within four years

What else must be filed when a UK portfolio is sold?

The sale itself is reported on Form 8949, Schedule D, Form 1116 and Form 8960. The account it came from must also appear on the FBAR and, above the thresholds, Form 8938. UK funds held in the account may be PFICs reported on Form 8621, with gains taxed under separate rules.

Large disposals have a way of surfacing older gaps. A share sale brings an account to the attention of an adviser for the first time, and it turns out the account was never on an FBAR, the dividends never reached a Form 1040, or an ISA was treated as tax-free on the US side. If that is the position, the 2027 sale should not be filed in isolation. The earlier years usually need to be put right first, often through the IRS Streamlined Filing Compliance Procedures, so that the 2027 return is built on a clean record. Our FBAR penalty calculator gives a sense of the exposure before you speak to anyone.

Common reporting errors we see on 2027 UK sales

• Copying the HMRC sterling gain onto Schedule D and converting it at one rate, which ignores the currency gain or loss on the original investment.
• Using the UK section 104 pooled cost on the US return when the lots sold were different.
• Claiming the UK tax on a May 2027 sale on the 2027 Form 1116 with no explanation of how it relates to that year.
• Treating NIIT as covered by the foreign tax credit.
• Leaving the gain out of the US return because UK tax was higher, so "nothing would be due". The sale still has to be reported, and NIIT often is due.
• Selling ISA investments and omitting the gain from the US return.

Getting both returns right

A 2027 disposal of UK shares or a UK property is one transaction reported twice, under two currencies, two tax years and two sets of identification rules. The 2027 US bands are now settled. The UK 2027/28 figures still need confirming from HMRC. Our US-UK tax accountants prepare the US and UK returns together so the gain, the credit and the timing line up, and so any earlier filing gaps are dealt with before the 2027 return goes in. If you have sold, or expect to sell, a significant UK holding this year, contact our cross-border team for a confidential consultation.