Capital Gains Tax on Shares UK 2026/27

Quick answer

Capital Gains Tax (CGT) is charged when you sell shares for more than you paid, but only on the gain above your tax-free allowance. In 2026/27 that annual exempt amount is £3,000 — so the first £3,000 of total gains across all your assets is free of tax. Above that, share gains are taxed at 18% to the extent they fall in your basic-rate band and 24% above it.

The mechanics matter: shares of the same class in the same company are combined into a Section 104 pool to calculate an average cost, and special same-day and 30-day rules stop you crystallising gains by selling and immediately rebuying. The good news is there are entirely legitimate ways to reduce or eliminate CGT — using your £3,000 exemption every year, bed-and-ISA to move holdings into a tax-free wrapper, and offsetting losses against gains.

This guide explains the rates, the pooling and matching rules, the reporting requirements, and the planning moves that keep your bill down.

The annual exempt amount

Every individual has an annual exempt amount (AEA) — the slice of gains you can realise tax-free each year. For 2026/27 it is £3,000, having been cut from £12,300 in 2022/23, then £6,000, then £3,000. Key points:

• It applies to your total gains across all assets (shares, funds, second properties, crypto), not per asset.
• It cannot be carried forward — use it or lose it each tax year.
• Gains inside an ISA or pension are exempt entirely and don't use your AEA.

Because the allowance is small and resets annually, realising gains gradually — say £3,000 of gain each year — can keep a portfolio entirely free of CGT over time. Work out your bill with the

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The rates: 18% and 24%

Since 30 October 2024, CGT rates on shares have been aligned with those on residential property:

The rate depends on your total taxable income plus gains. You stack your taxable gains on top of your income: the part of the gain that fits within your remaining basic-rate band is taxed at 18%, and the rest at 24%.

Example: Priya has £40,000 of taxable income, leaving about £10,270 of her basic-rate band unused (the basic-rate limit is £50,270). She makes a £15,000 share gain. After the £3,000 exemption, £12,000 is taxable. The first £10,270 is taxed at 18% (£1,849) and the remaining £1,730 at 24% (£415) — a total of £2,264.

Section 104 pooling

You rarely buy all your shares in one go, so HMRC needs a way to work out your "cost" when you sell. For most shares, the answer is the Section 104 holding (the "share pool").

All shares of the same class in the same company are pooled together. Each purchase adds to the pool's total cost and total number of shares; when you sell, you use the average cost per share across the pool.

Example: you buy 100 shares at £10 (£1,000) and later 100 more at £14 (£1,400). Your pool is 200 shares costing £2,400 — an average of £12 each. If you sell 50 shares, their cost is 50 × £12 = £600, regardless of which "batch" you think you sold. This averaging is automatic and is what most disposals use.

The same-day and 30-day rules

Two rules override Section 104 pooling to stop a tactic called "bed and breakfasting" — selling shares to use your annual exemption (or crystallise a loss) and immediately buying them straight back.

1. Same-day rule: shares bought and sold on the same day are matched to each other first.
2. 30-day rule (the "bed and breakfast" rule): if you buy back the same shares within 30 days of selling, the sale is matched to that repurchase, not to your pool.

The effect: if you sell to bank a gain within your £3,000 allowance and rebuy within 30 days, HMRC treats it as if you never really sold — so the planned use of your exemption fails. To genuinely crystallise a gain or loss, you must either wait more than 30 days before rebuying, or buy back in a different wrapper (see bed-and-ISA below). The

helps you plan disposals around these rules.

Bed-and-ISA: the legitimate workaround

The 30-day rule blocks selling and rebuying the same shares in a normal account. But you can sell shares in a taxable account and immediately repurchase them inside an ISA — this is bed-and-ISA, and the 30-day rule does not apply because the ISA repurchase is a separate, tax-sheltered acquisition.

The benefits are twofold:

• You crystallise a gain now, using your £3,000 annual exemption to shelter it (and only paying CGT on any excess).
• The shares are then inside your ISA, so all future growth and dividends are tax-free and never subject to CGT again.

Done over several years — moving up to £20,000 of holdings into your ISA each tax year while keeping gains within the £3,000 exemption — bed-and-ISA gradually shelters an entire portfolio from CGT. There is usually a small dealing cost and the spread to pay, and the price can move between the sale and repurchase, but for long-term investors it is one of the most effective tools available. Plan it with the

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Offsetting losses

If you sell shares at a loss, you can set that loss against your gains:

• Current-year losses are offset against current-year gains before your annual exemption — so you can't waste the exemption by netting losses against gains below £3,000. (In practice, you set losses against gains in a way that preserves the exemption where the rules allow.)
• Unused losses can be carried forward indefinitely to offset future gains, but only if you report them to HMRC within four years of the end of the tax year in which they arose.

This makes loss harvesting — deliberately selling losing holdings to bank the loss — a useful year-end exercise, especially in a down market. Carried-forward losses are a valuable asset that can shelter big future gains, so always report them even in a year you owe no tax. Model the netting with the

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Reporting share gains on Self Assessment

You report CGT on shares through Self Assessment. You must report if either:

• Your total gains exceed the £3,000 annual exempt amount, or
• Your total proceeds exceed £50,000 in the tax year — even if the gain is within the allowance.

The CGT is due by 31 January following the end of the tax year (so 2026/27 gains are payable by 31 January 2028). Unlike UK residential property — which has a separate 60-day reporting and payment deadline — share gains go through the normal Self Assessment timetable. Keep records of every purchase and sale, including dates, quantities and costs, so you can compute the pool and the gain accurately.

What is exempt

Some share disposals never attract CGT:

• Shares held in an ISA or pension — completely exempt, no reporting needed.
• Gilts (UK government bonds) and most qualifying corporate bonds — exempt.
• Transfers between spouses or civil partners — no CGT on the transfer (made on a "no gain, no loss" basis), which lets couples share gains across two £3,000 allowances and two sets of tax bands.

That spouse exemption is a powerful planning tool: transferring shares to a lower-earning partner before a sale can both use their £3,000 allowance and tax the gain at 18% rather than 24%.

Funds, ETFs and accumulation units

Most investors hold shares through funds and ETFs rather than individual company shares, and the same CGT principles apply — but with a few wrinkles worth knowing:

• Accumulation units (where income is reinvested automatically rather than paid out) still generate taxable dividend income each year, even though you never receive cash. That reinvested income is added to the cost of your holding (the "equalisation" and "notional distribution" adjustments), which reduces your eventual gain. Failing to track this means overpaying CGT later.
• Switching between funds counts as a disposal for CGT, even if you stay with the same platform or fund house. Moving from one fund to another crystallises a gain or loss on the one you sold.
• Offshore funds without UK "reporting status" can have gains taxed as income at your marginal rate rather than at CGT rates — a nasty surprise, so check a fund's reporting status before buying.

For most ordinary investors using mainstream UK-domiciled funds inside a general investment account, the Section 104 pool and the £3,000 exemption work just as they do for shares. The key discipline is record-keeping: platforms provide tax statements, but you remain responsible for reporting correctly. Sheltering funds inside an ISA via

removes all of this complexity for the holdings you move across.

Timing disposals across tax years

Because the £3,000 exemption resets every 6 April, the timing of a large sale can change your tax bill significantly. If you have a big gain to realise and no urgent need for the cash, splitting the sale across two tax years uses two annual exemptions (£6,000 total) and can keep more of the gain in the lower 18% band if your income leaves room.

Example: you want to sell a holding sitting on a £10,000 gain. Sell half in late March and half in early April and you straddle two tax years — using £3,000 of exemption in each, so only £4,000 is taxable rather than £7,000. With careful planning around your income bands, a year-end split can cut a four-figure gain's tax bill by hundreds of pounds. Just keep the 30-day rule in mind if you intend to rebuy, and watch that a March/April split does not accidentally fall within 30 days of a repurchase. The

lets you test both single-year and split scenarios.

A year-end CGT checklist

Before 5 April each year, consider:

1. Have you used your £3,000 exemption? Realise gains up to it if you have unsheltered holdings.
2. Could you bed-and-ISA some holdings to shelter future growth?
3. Do you have losing positions worth selling to harvest losses?
4. Could you transfer shares to a spouse to use their allowance and lower rate?
5. Have you reported prior-year losses so you can carry them forward?

Working through this list each year keeps a portfolio CGT-efficient and avoids a large, avoidable bill when you eventually sell. Run the numbers with the

first.

Common questions

Do I pay CGT on dividends? No — dividends are income, taxed under Dividend Tax (10.75%/35.75%/39.35% above the £500 dividend allowance), not CGT. CGT only applies to the gain when you sell the shares.

What if I hold shares in a foreign company? UK residents are generally taxable on worldwide gains, so foreign share gains usually fall within UK CGT. Currency movements also affect the gain, as it is computed in sterling. Take advice if you hold significant overseas assets.

Are employee share scheme shares treated differently? Often yes — shares from approved schemes such as SAYE or SIP can be transferred straight into an ISA within 90 days free of CGT, and some schemes have their own reliefs. Check the specific scheme rules.

Does the 30-day rule apply across tax years? Yes — the 30-day window runs by calendar days from the sale, so a sale near the end of the tax year and a rebuy in the new tax year can still be caught if within 30 days.

The bottom line

Capital Gains Tax on shares in 2026/27 means a £3,000 tax-free allowance, then 18% or 24% depending on your income band. The Section 104 pool sets your cost, while the same-day and 30-day rules stop you gaming the system by selling and instantly rebuying. The smart response is to plan: use your £3,000 exemption every year, move holdings into an ISA with bed-and-ISA to shelter future growth, harvest and report losses, and use a spouse's allowance and band where you can. Done consistently, these moves can keep a substantial portfolio almost entirely free of CGT.

This article is general information, not tax advice. Figures use 2026/27 UK rates for England, Wales and Northern Ireland. Confirm your position with HMRC or an adviser before acting, especially for large or complex disposals.