Answers · UK 2025/26

How do the share matching rules and the Section 104 pool work for capital gains tax?

When you sell shares of the same class, HMRC matches the sale in a set order: first to shares bought the same day, then to shares bought within the next 30 days, then to the Section 104 pool (a single averaged-cost holding). This decides the gain, not which certificate you sold.

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

Full answer

UK CGT does not let you cherry-pick which shares you sold. Instead HMRC applies fixed matching rules to identify the acquisition cost. Disposals are matched in this order: (1) shares acquired on the same day as the sale; (2) shares acquired in the 30 days after the sale (the 'bed and breakfast' anti-avoidance rule); (3) the Section 104 holding, a pool of all earlier acquisitions of the same class of share in the same company, held at average cost. Worked example: your Section 104 pool holds 1,000 shares in Company X with a total cost of GBP 8,000, so the pooled cost is GBP 8 per share. You sell 400 shares for GBP 6,000. None were bought the same day or in the next 30 days, so all 400 are matched to the pool: cost 400 x GBP 8 = GBP 3,200, giving a gain of GBP 2,800. That is within the GBP 3,000 annual exempt amount for 2026/27, so no CGT is due. The pool then holds 600 shares costing GBP 4,800. If a gain remained, basic-rate band gains are taxed at 18% and higher-rate at 24% in 2026/27. Funds and most ETFs follow the same pooling logic. The 30-day rule blocks selling to crystallise a loss and rebuying immediately, which is why investors use a 'bed and ISA' instead. Use the Capital Gains Tax calculator to model a disposal, and confirm the matching rules at gov.uk.