Capital Gains Tax on Shares UK 2026/27: Pooling, Bed & ISA
Selling shares at a profit can land you with a Capital Gains Tax bill — but the rules are full of detail that decides how much you actually pay. With the annual exempt amount now just £3,000 and rates of 18% and 24%, far more ordinary investors are caught than a few years ago. This guide explains exactly how CGT on shares works in 2026/27: the £3,000 allowance, the 18%/24% rates, the Section 104 pooling that averages your cost, the same-day and 30-day matching rules that stop bed-and-breakfasting, the powerful bed-and-ISA strategy for sheltering future gains, and how to report and pay. Worked examples show the numbers for basic and higher-rate investors.
Capital Gains Tax (CGT) is charged on the profityou make when you dispose of shares — not on the total amount you receive. The gain is broadly the sale proceeds less what you paid for the shares and certain allowable costs such as dealing commission and stamp duty. A “disposal” includes selling, gifting (other than to a spouse), or transferring shares to another person.
Crucially, shares held inside a Stocks and Shares ISA or a pension are completely outside CGT — only shares in a taxable General Investment Account or held directly are caught. That single fact shapes most sensible CGT planning: use your tax wrappers first.
The £3,000 Allowance and the 18%/24% Rates
Every individual has an annual exempt amount of £3,000 in 2026/27 — the first £3,000 of net gains across all assets is tax-free. It cannot be carried forward, so an unused allowance is lost at the end of the tax year.
Gains above the allowance are taxed at 18% to the extent they fall within your remaining basic-rate band, and 24% on any part falling in the higher or additional-rate band. There is no longer a special higher rate for shares — the 18%/24% rates apply to shares, funds and most other assets. Your gain is stacked on top of your income, so a single gain can be split across both rates.
When you buy the same share in the same company on different dates, HMRC merges them into a single Section 104 holding with one average cost. Each purchase adds to the pool and recalculates the average cost per share; each sale uses that average.
This is why you cannot cherry-pick your most expensive shares to sell. If you bought 100 shares at £5 and another 100 at £15, the pool holds 200 shares at an average of £10 — and a sale of 50 shares uses a £10 cost regardless of which lot you “feel” you are selling.
The 30-Day Rule and Matching Order
To stop investors banking a loss or resetting a base cost by selling and instantly rebuying (“bed and breakfasting”), HMRC matches disposals in a fixed order:
Same day: shares of the same class bought on the day of sale.
Next 30 days: shares bought in the 30 days after the sale (the bed-and-breakfasting rule).
Section 104 pool: everything else, at the average pooled cost.
The practical upshot: if you sell and rebuy the same shares within 30 days, the trade is matched against the repurchase, so it does not crystallise the gain or loss you intended. Waiting 31+ days, rebuying inside an ISA, or having a spouse buy the shares all sidestep the rule.
The Bed-and-ISA Strategy
A bed-and-ISA sells shares from a taxable account and immediately rebuys them inside a Stocks and Shares ISA. The sale uses some of your £3,000 CGT allowance, but once the shares are inside the ISA, all future growth and dividends are tax-free forever — and, because the shares move into a different wrapper, the 30-day rule does not block the repurchase.
Repeated each tax year up to the £20,000 ISA limit, a bed-and-ISA gradually moves a taxable portfolio into a tax-free one while crystallising gains within the annual allowance. Read the ISA types guide for the wrapper rules.
Using Capital Losses
Losses on shares are valuable. In-year losses are set against in-year gains beforethe £3,000 allowance is applied. Any surplus loss is carried forward indefinitely and used in later years — but only enough to bring future gains down to the annual exempt amount, so you never “waste” the allowance.
You must notify HMRC of a loss (normally on a Self Assessment return) within four years of the end of the tax year it arose in, or you lose the right to claim it.
Reporting and Paying CGT on Shares
The 60-day reporting deadline applies only to UK residential property — not to shares. Share gains are reported either through your Self Assessment return after the tax year ends, or via HMRC's real-time CGT service if you do not otherwise file.
You must report if your total gains exceed £3,000, or if your total proceeds for the year exceed £50,000 even where the gain is within the allowance. The tax is then due by 31 January following the end of the tax year.
Worked Examples
Two investors each realise a £13,000 gain on shares in 2026/27. After the £3,000 allowance, £10,000 is taxable:
Investor
Taxable gain
Rate applied
CGT due
Basic-rate (room in band)
£10,000
18%
£1,800
Higher-rate
£10,000
24%
£2,400
If the basic-rate investor only had £4,000 of basic-rate band left, £4,000 of the gain would be taxed at 18% and the remaining £6,000 at 24% — £720 + £1,440 = £2,160. The gain always stacks on top of income to decide the split. Model your own figures with the CGT calculator.
How much Capital Gains Tax do I pay on shares in 2026/27?
In 2026/27 you have a £3,000 annual exempt amount — the first £3,000 of net gains across all your assets is tax-free. Gains above that are taxed at 18% if they fall within your remaining basic-rate band and 24% on any part that falls in the higher or additional-rate band. Unlike residential property, there is no separate higher CGT rate for shares: the 18%/24% rates apply to shares, funds and other chargeable assets. Your gains are stacked on top of your income to decide how much falls in each band, so the same gain can be partly taxed at 18% and partly at 24%.
What is the Section 104 pooling rule for shares?
When you hold multiple lots of the same share in the same company, HMRC treats them as a single "Section 104 holding" — one pool with a single average cost. Each time you buy, the new cost is added to the pool and the average cost per share is recalculated. When you sell, you take the average cost of the pooled shares to work out the gain, rather than tracking each individual purchase. This pooling is why you cannot simply sell your most expensive shares to minimise gains: the cost is averaged across the whole holding.
What is the 30-day rule (bed and breakfasting)?
The "bed and breakfasting" rule stops investors selling shares to crystallise a gain or loss and immediately buying them back. If you sell shares and buy the same shares back within 30 days, the disposal is matched against those repurchased shares rather than the Section 104 pool — so the trade does not reset your base cost or bank the loss as intended. The matching order is: same-day acquisitions first, then acquisitions in the next 30 days, then the Section 104 pool. Waiting more than 30 days, or buying back inside an ISA or a spouse's account, sidesteps the rule.
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What is a bed-and-ISA and how does it cut CGT?
A bed-and-ISA means selling shares held in a taxable General Investment Account and immediately rebuying them inside a Stocks and Shares ISA. The sale uses up some of your £3,000 CGT allowance (and may trigger a small taxable gain), but once the shares sit inside the ISA all future growth and dividends are completely tax-free. Because the shares move into a different tax wrapper, the 30-day rule does not block the repurchase. Done every tax year up to the £20,000 ISA limit, a bed-and-ISA gradually shelters a taxable portfolio from CGT for good.
How are shares matched when I sell — which shares am I disposing of?
HMRC applies a strict matching order. First, shares are matched against any of the same shares you bought on the same day. Second, against any you buy in the following 30 days (the bed-and-breakfasting rule). Third, and for most ordinary investors this is the only step that applies, against the Section 104 pool at its average cost. This ordering matters because it determines which acquisition cost is used to calculate your gain, and it is the reason a quick sell-and-rebuy does not work for banking a loss or resetting a base cost.
Can I use losses on shares to reduce my Capital Gains Tax?
Yes. Allowable capital losses are first set against gains in the same tax year, before the £3,000 annual exempt amount is applied. If your losses exceed your gains, the surplus can be carried forward indefinitely and used in future years — but in a future year you only use enough carried-forward loss to bring gains down to the annual exempt amount, preserving the rest. You must report losses to HMRC (usually on the Self Assessment return) within four years of the end of the tax year in which they arose to be able to claim them later.
How do I report and pay CGT on shares?
For share disposals there is no 60-day reporting deadline (that applies only to UK residential property). Instead you report share gains either through your Self Assessment tax return after the tax year ends, or via HMRC's real-time Capital Gains Tax service if you do not otherwise file a return. You must report if your total gains exceed the £3,000 allowance, or if your total proceeds exceed £50,000 in the year even where the gain is within the allowance. CGT is then due by 31 January following the end of the tax year, alongside any Self Assessment balancing payment.
Do I pay CGT on shares held in an ISA or pension?
No. Shares held inside a Stocks and Shares ISA or a pension (SIPP or workplace scheme) are entirely outside Capital Gains Tax — you can buy and sell freely with no CGT to report, however large the gain. This is the core reason to use your £20,000 annual ISA allowance and your pension allowance before holding investments in a taxable account. Only shares in a General Investment Account, or held directly, are subject to CGT and the pooling and matching rules described in this guide.
How do I work out the gain on shares I inherited or was given?
Inherited shares are treated as acquired at their market value on the date of death (the "probate value"), so any growth before then is wiped out for CGT and only later growth is taxable when you sell. Shares received as a gift are normally treated as acquired at their market value on the date of the gift, and the person giving them may themselves trigger a CGT disposal. Transfers between spouses or civil partners are different: they pass at no gain/no loss, so the receiving partner inherits the original base cost and the gain only crystallises when they eventually sell.
Should I crystallise gains each year to use my £3,000 allowance?
For many investors, yes. The annual exempt amount cannot be carried forward — use it or lose it — so deliberately realising up to £3,000 of gains each tax year, then optionally rebuying after 30 days or inside an ISA, gradually steps up your base cost tax-free. Over many years this can save a meaningful amount of CGT compared with letting a single large gain build up. Weigh the dealing costs and the 30-day rule, and remember that since the allowance fell to £3,000 the value of this housekeeping has shrunk but not disappeared.
Are funds and ETFs treated the same as individual shares for CGT?
Largely, yes. Units in an OEIC, unit trust or ETF are chargeable assets subject to the same £3,000 allowance, 18%/24% rates, Section 104 pooling and 30-day rule as individual shares. One wrinkle is accumulation funds, where income is reinvested rather than paid out: the reinvested income (the "notional distribution") is added to your base cost so you are not taxed twice when you sell. Offshore reporting versus non-reporting funds are also treated differently, with non-reporting fund gains taxed as income rather than capital — worth checking before you buy.
Disclaimer: This guide reflects 2026/27 UK Capital Gains Tax rules for shares. The annual exempt amount, CGT rates, pooling and matching rules and ISA limits change at fiscal events, and your liability depends on your other income and personal circumstances. Consult a qualified tax adviser before acting on a significant disposal, and refer to gov.uk for current rates.