Answers · UK 2025/26

Do I pay Capital Gains Tax on shares held in an ISA?

No. All growth, gains and dividends within a Stocks and Shares ISA are completely free of both Capital Gains Tax and Income Tax, no matter how large the gain, as long as the shares stay within the ISA wrapper and you keep to the £20,000 annual ISA subscription limit.

Last updated: 10 July 2026Last reviewed: 10 July 2026How we verify

Full answer

Shares, funds and other investments held inside a Stocks and Shares ISA grow entirely free of UK tax. Any capital gain made when you sell an investment within the ISA is exempt from Capital Gains Tax, and this exemption is unlimited -- unlike the £3,000 annual Capital Gains Tax exempt amount that applies to investments held outside an ISA, there is no cap on how much tax-free gain an ISA can shelter over your lifetime. Dividends received within a Stocks and Shares ISA are also free of dividend tax, and interest earned within a Cash ISA (or the cash element of a Stocks and Shares ISA) is free of income tax, regardless of your normal Personal Savings Allowance. The only limit that applies is the annual ISA subscription limit of £20,000 for 2026/27 -- the total amount you can pay into ISAs across all ISA types in a single tax year -- but once money is inside the ISA wrapper, it can grow, be reinvested, and be withdrawn without any further tax consequences, and there is no limit on the total value an ISA can grow to over time. This makes moving existing shares into an ISA (a process often called 'Bed and ISA') a popular strategy: you sell the shares outside the ISA (potentially triggering CGT on any gain up to that point, though the £3,000 annual exemption may cover this), then immediately buy the same shares back inside the ISA using that year's subscription allowance, so future growth on those shares becomes permanently tax-free. Shares cannot simply be transferred directly into an ISA in specie in most cases without going through a sale and repurchase, except for certain employee share scheme shares which have special direct-transfer rules. Because ISA gains never need to be reported to HMRC, they also do not count toward your income for calculating the High Income Child Benefit Charge, Personal Allowance taper, or other income-based thresholds. Use the ISA calculator to see how much of your investments you can shelter this year.