Answers · UK 2025/26

How is Capital Gains Tax calculated when I sell company shares?

Shares are pooled using the s.104 pool (weighted average cost). Your gain is proceeds minus the s.104 pool cost, less incidental costs. Deduct the £3,000 AEA. Tax is then 18% (basic rate taxpayer) or 24% (higher rate) in 2026/27. The 30-day bed-and-breakfast rule and same-day rule prevent using the AEA by quickly repurchasing shares.

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

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When you sell shares in a company, Capital Gains Tax (CGT) is calculated using a specific set of matching rules and pooling provisions set out in TCGA 1992. The s.104 pool (also called the share pool) is the core mechanism: all shares of the same class in the same company held by you are pooled together, and the pool tracks the total number of shares and their total cost (updated each time you buy or sell). When you sell some shares, you identify the cost by proportionally reducing the pool. Worked example: you bought 1,000 shares at £2 each (cost £2,000) and later bought 500 more at £4 each (cost £2,000). Your pool now contains 1,500 shares with a total cost of £4,000 -- an average cost of £2.67 per share. If you sell 750 shares at £5 each (proceeds £3,750), the allowable cost is 750/1,500 x £4,000 = £2,000. Your gain is £3,750 minus £2,000 = £1,750. Deduct the Annual Exempt Amount (AEA) of £3,000 -- in this example the gain is below the AEA so no CGT is due. Matching rules override the pool in certain cases to prevent bed-and-breakfast avoidance: (1) same-day rule: shares sold and bought on the same day are matched before using the pool; (2) 30-day rule: shares sold and repurchased within 30 days are matched against the repurchase (not the pool). If you want to use your AEA by realising a gain and maintaining the same position, you must wait more than 30 days before repurchasing -- or use a spouse's/civil partner's allowance, or repurchase within an ISA or SIPP (bed-and-ISA / bed-and-SIPP). CGT rates for 2026/27: 18% if the gain falls within your basic rate band; 24% if it falls in the higher or additional rate band. Losses on other shares can be offset against gains. Report via Self Assessment if total disposal proceeds exceed four times the AEA (£12,000 in 2026/27) or if gains exceed the AEA.