diff --git a/lua/orgmode/capture/init.lua b/lua/orgmode/capture/init.lua
index 9f89c837d..326407774 100644
--- a/lua/orgmode/capture/init.lua
+++ b/lua/orgmode/capture/init.lua
@@ -73,6 +73,7 @@ end
 ---@param template OrgCaptureTemplate
 ---@return OrgPromise<OrgCaptureWindow>
 function Capture:open_template(template)
+  template.files = self.files
   local window = CaptureWindow:new({
     template = template,
     on_open = function(capture_window)
diff --git a/lua/orgmode/capture/template/init.lua b/lua/orgmode/capture/template/init.lua
index 5bf95b3fd..d8f3ec225 100644
--- a/lua/orgmode/capture/template/init.lua
+++ b/lua/orgmode/capture/template/init.lua
@@ -5,6 +5,56 @@ local Calendar = require('orgmode.objects.calendar')
 local Promise = require('orgmode.utils.promise')
 local Input = require('orgmode.ui.input')
 
+---@description For `%^g` expansion in capture templates: gets all tags in the targeted file.
+---@param template? table
+---@return string[]
+local function get_target_tags(template)
+  local files = template and template.files
+  if not files or not template or template.target == '' then
+    return {}
+  end
+
+  local ok, file = pcall(function()
+    return files:get(template:get_target())
+  end)
+
+  if not ok or not file then
+    return {}
+  end
+
+  return file:get_tags()
+end
+
+---@description For `%^G` expansion in capture templates: gets all tags in all agenda files.
+---@param template? table
+---@return string[]
+local function get_all_tags(template)
+  local files = template and template.files
+  if not files then
+    return {}
+  end
+  return files:get_tags()
+end
+
+---@param tags_source string[]
+---@return OrgPromise<string>
+local function prompt_tags(tags_source)
+  local completion = function(arg_lead)
+    return utils.prompt_autocomplete(arg_lead, tags_source, { ':' })
+  end
+  return Input.open('Tags: ', '', completion):next(function(input)
+    if input == nil then
+      return nil
+    end
+    if input == '' then
+      return ''
+    end
+
+    local tags = utils.parse_tags_string(input)
+    return utils.tags_to_string(tags)
+  end)
+end
+
 local expansions = {
   ['%%f'] = function()
     return vim.fn.expand('%')
@@ -73,6 +123,12 @@ local expansions = {
       return date and date:to_wrapped_string(false) or nil
     end)
   end,
+  ['%%%^g'] = function(_, template)
+    return prompt_tags(get_target_tags(template))
+  end,
+  ['%%%^G'] = function(_, template)
+    return prompt_tags(get_all_tags(template))
+  end,
   ['%%a'] = function()
     return string.format('[[file:%s::%s]]', utils.current_file_path(), vim.api.nvim_win_get_cursor(0)[1])
   end,
@@ -90,7 +146,8 @@ local expansions = {
 ---@field whole_file? boolean
 
 ---@class OrgCaptureTemplate:OrgCaptureTemplateOpts
----@field private _compile_hooks (fun(content:string, content_type: 'target' | 'content'):string | nil)[]
+---@field files? OrgFiles
+---@field private _compile_hooks? (fun(content:string, content_type: 'target' | 'content'):string | nil)[]
 local Template = {}
 
 ---@param opts OrgCaptureTemplateOpts
@@ -306,7 +363,7 @@ function Template:_compile_expansions(content)
       local match = ('%' .. exp):match(expansion)
       if match then
         table.insert(compiled_expansions, function()
-          return Promise.resolve(compiler(match)):next(function(replacement)
+          return Promise.resolve(compiler(match, self)):next(function(replacement)
             if not proceed or not replacement then
               return Promise.reject('canceled')
             end
@@ -357,14 +414,28 @@ end
 ---@return OrgPromise<string>
 function Template:_compile_prompts(content)
   local prepared_inputs = {}
-  for exp in content:gmatch('%%%^%b{}') do
+  -- Match %^{...} with optional g/G suffix for tag prompts
+  for exp in content:gmatch('%%%^%b{}[gG]?') do
     local details = exp:match('%{(.*)%}')
     local parts = vim.split(details, '|')
     local title, default = parts[1], parts[2]
+
+    -- Check if this is a tag prompt (ends with g or G)
+    local is_tag_prompt = exp:sub(-1, -1) == 'g' or exp:sub(-1, -1) == 'G'
+
+    local original_exp = exp
+    -- If it's a tag prompt, remove the g/G from the expression for replacement
+    if is_tag_prompt then
+      exp = exp:sub(1, -2) -- Remove just the g/G, keep the closing brace
+    end
+
     local input = {
       fallback_value = default,
       exp = exp,
+      original_exp = original_exp, -- Keep the original (with g/G) for replacement
+      is_tag_prompt = is_tag_prompt,
     }
+
     if #parts > 2 then
       input.prompt = string.format('%s [%s]: ', title, default)
       input.completion = function()
@@ -391,7 +462,21 @@ function Template:_compile_prompts(content)
         if not response or #response == 0 then
           response = prepared_input.fallback_value
         end
-        content = content:gsub(vim.pesc(prepared_input.exp), response)
+
+        -- Handle tag prompts specially - format with colons
+        if prepared_input.is_tag_prompt and response and response ~= '' then
+          response = utils.tags_to_string(utils.parse_tags_string(response))
+        end
+
+        -- For tag prompts, we need to search for the original expression (with g/G)
+        -- but use the response which is already formatted (with :tags:)
+        -- Don't escape for tag prompts since we need the % to match literally
+        if prepared_input.is_tag_prompt then
+          -- Manually escape % for tag prompts (other chars dont need escaping for literal match)
+          content = content:gsub(prepared_input.original_exp:gsub('%%', '%%%%'), response)
+        else
+          content = content:gsub(vim.pesc(prepared_input.original_exp), response)
+        end
       end)
   end, prepared_inputs):next(function()
     return content
diff --git a/lua/orgmode/files/file.lua b/lua/orgmode/files/file.lua
index ad5f6bc40..45673158f 100644
--- a/lua/orgmode/files/file.lua
+++ b/lua/orgmode/files/file.lua
@@ -612,6 +612,30 @@ function OrgFile:get_filetags()
   return utils.parse_tags_string(self:_get_directive('filetags'))
 end
 
+memoize('get_tags')
+--- Get all unique tags from the file (file-level tags + headline tags)
+--- @return string[]
+function OrgFile:get_tags()
+  local tags = {}
+  local file_tags = self:get_filetags()
+  if file_tags and #file_tags > 0 then
+    for _, tag in ipairs(file_tags) do
+      tags[tag] = 1
+    end
+  end
+  for _, headline in ipairs(self:get_headlines()) do
+    local htags = headline:get_tags()
+    if htags and #htags > 0 then
+      for _, tag in ipairs(htags) do
+        tags[tag] = 1
+      end
+    end
+  end
+  local taglist = vim.tbl_keys(tags)
+  table.sort(taglist)
+  return taglist
+end
+
 memoize('get_blocks')
 --- @return OrgBlock[]
 function OrgFile:get_blocks()
diff --git a/lua/orgmode/files/init.lua b/lua/orgmode/files/init.lua
index 93dad134e..ca58cfa72 100644
--- a/lua/orgmode/files/init.lua
+++ b/lua/orgmode/files/init.lua
@@ -96,19 +96,8 @@ function OrgFiles:get_tags()
   local tags = {}
   for _, orgfile in ipairs(self:all()) do
     if not orgfile:is_archive_file() then
-      local file_tags = orgfile:get_filetags()
-      if file_tags and #file_tags > 0 then
-        for _, tag in ipairs(file_tags) do
-          tags[tag] = 1
-        end
-      end
-      for _, headline in ipairs(orgfile:get_headlines()) do
-        local htags = headline:get_tags()
-        if htags and #htags > 0 then
-          for _, tag in ipairs(htags) do
-            tags[tag] = 1
-          end
-        end
+      for _, tag in ipairs(orgfile:get_tags()) do
+        tags[tag] = 1
       end
     end
   end
diff --git a/tests/plenary/capture/templates_spec.lua b/tests/plenary/capture/templates_spec.lua
index fbd5a5ecc..498af241c 100644
--- a/tests/plenary/capture/templates_spec.lua
+++ b/tests/plenary/capture/templates_spec.lua
@@ -1,5 +1,8 @@
 local Template = require('orgmode.capture.template')
 local Date = require('orgmode.objects.date')
+local helpers = require('tests.plenary.helpers')
+local Input = require('orgmode.ui.input')
+local Promise = require('orgmode.utils.promise')
 
 describe('Capture template', function()
   it('should compile expression', function()
@@ -87,4 +90,106 @@ describe('Capture template', function()
     end)
     assert.is.Nil(template:compile():wait())
   end)
+
+  it('should prompt for single tag with %^g', function()
+    helpers.with_var(Input, 'open', function(_prompt, _default, _completion)
+      return Promise.resolve('mytag')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^g',
+      })
+      assert.are.same({ '* TODO :mytag:' }, template:compile():wait())
+    end)
+  end)
+
+  it('should prompt for multiple tags with %^G', function()
+    helpers.with_var(Input, 'open', function(_prompt, _default, _completion)
+      return Promise.resolve('tag1:tag2')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^G',
+      })
+      assert.are.same({ '* TODO :tag1:tag2:' }, template:compile():wait())
+    end)
+  end)
+
+  it('should prompt for restricted tags with %^{tag1|tag2}G', function()
+    helpers.with_var(Input, 'open', function(_prompt, _default, _completion)
+      return Promise.resolve('tag1')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^{tag1|tag2}G',
+      })
+      assert.are.same({ '* TODO :tag1:' }, template:compile():wait())
+    end)
+  end)
+
+  it('should not cancel capture when %^g input is empty', function()
+    helpers.with_var(Input, 'open', function(_prompt, _default, _completion)
+      return Promise.resolve('')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^g',
+      })
+      assert.are.same({ '* TODO ' }, template:compile():wait())
+    end)
+  end)
+  it('should complete %^g from target file tags only', function()
+    local fixtures, org_files = helpers.create_agenda_files({
+      {
+        filename = 'target.org',
+        content = {
+          '#+FILETAGS: :target_file:',
+          '* TODO target item :target_headline:',
+        },
+      },
+      {
+        filename = 'other.org',
+        content = {
+          '* TODO other item :other_headline:',
+        },
+      },
+    })
+
+    helpers.with_var(Input, 'open', function(_prompt, _default, completion)
+      assert.are.same({ 'target_file', 'target_headline' }, completion(''))
+      return Promise.resolve('target_headline')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^g',
+        target = fixtures['target.org'],
+      })
+      template.files = org_files
+      assert.are.same({ '* TODO :target_headline:' }, template:compile():wait())
+    end)
+  end)
+
+  it('should complete %^G from all loaded agenda file tags', function()
+    local _, org_files = helpers.create_agenda_files({
+      {
+        filename = 'target.org',
+        content = {
+          '#+FILETAGS: :target_file:',
+          '* TODO target item :target_headline:',
+        },
+      },
+      {
+        filename = 'other.org',
+        content = {
+          '* TODO other item :other_headline:',
+        },
+      },
+    })
+
+    helpers.with_var(Input, 'open', function(_prompt, _default, completion)
+      assert.are.same({ 'other_headline', 'target_file', 'target_headline' }, completion(''))
+      return Promise.resolve('target_headline:other_headline')
+    end, function()
+      local template = Template:new({
+        template = '* TODO %^G',
+      })
+      template.files = org_files
+      assert.are.same({ '* TODO :target_headline:other_headline:' }, template:compile():wait())
+    end)
+  end)
 end)
diff --git a/tests/plenary/helpers.lua b/tests/plenary/helpers.lua
index d9aa8f427..516c15846 100644
--- a/tests/plenary/helpers.lua
+++ b/tests/plenary/helpers.lua
@@ -1,5 +1,3 @@
-local orgmode = require('orgmode')
-
 local M = {}
 
 ---Temporarily change a variable.
@@ -28,6 +26,7 @@ end
 
 ---@param path string
 function M.load_file(path)
+  local orgmode = require('orgmode')
   vim.cmd.edit(vim.fn.fnameescape(path))
   return orgmode.files:get(path)
 end
@@ -47,6 +46,7 @@ end
 ---@param config? table
 ---@return OrgFile
 function M.create_agenda_file(lines, config)
+  local orgmode = require('orgmode')
   local fname = vim.fn.tempname() .. '.org'
   vim.fn.writefile(lines or {}, fname)
 
@@ -60,8 +60,9 @@ end
 
 ---@param fixtures {filename: string, content: string[] }[]
 ---@param config? table
----@return table
+---@return table, OrgFiles
 function M.create_agenda_files(fixtures, config)
+  local orgmode = require('orgmode')
   -- NOTE: content is only 1 line for 1 file
   local temp_fname = vim.fn.tempname()
   local temp_dir = vim.fn.fnamemodify(temp_fname, ':p:h')
@@ -85,7 +86,7 @@ function M.create_agenda_files(fixtures, config)
   }, config or {})
   local org = orgmode.setup(cfg)
   org:init()
-  return files
+  return files, org.files
 end
 
 return M