Capital Gains Tax on Share Sales 2026/27: Rates, Allowance and How to Calculate What You Owe

The £3,000 Annual Exempt Amount

Every individual gets a Capital Gains Tax annual exempt amount of £3,000 for 2026/27 — the total amount of gains (summed across all chargeable assets sold in the tax year: shares, second properties, business assets, valuable personal possessions above certain limits, etc.) you can realise before any CGT is due.

This allowance has been reduced significantly in recent years (it was £12,300 as recently as 2022/23), meaning far more ordinary investors selling shares outside an ISA now find themselves with a CGT liability than in the past.

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CGT Rates for 2026/27

Since the October 2024 Budget, these rates apply uniformly across most asset types (shares, second properties, and other chargeable assets), removing the previous distinction where residential property gains were taxed at a higher rate than shares.

How the rate is determined: your capital gain is added on top of your taxable income for the year to determine which CGT band it falls into. If your income alone uses up your basic-rate band, the entire gain is taxed at 24%. If your income leaves some basic-rate band headroom, the gain fills that headroom at 18% first, with any remainder taxed at 24%.

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Worked Example

Priya has taxable income of £45,000 (after her Personal Allowance) and realises a £13,000 gain on a share sale in 2026/27.

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Calculating the Gain: The Basic Formula

Gain = Sale proceeds − Acquisition cost − Allowable costs

For shares bought in a single transaction and sold in full, this is straightforward. It becomes more complex when the same company's shares were bought at different times and prices.

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Share Matching Rules

HMRC applies a specific order when determining which shares (and therefore which cost) are treated as sold, when you hold multiple tranches of the same company's shares:

1. Same-day rule: shares bought on the same day as the sale are matched first.
2. 30-day rule ("bed and breakfasting" rule): shares bought within the 30 days after the sale are matched next — this exists specifically to prevent selling shares to crystallise a loss (or use the annual exempt amount) and immediately buying them back to maintain the same position.
3. Section 104 pool: all remaining shares of that company held before the sale are pooled together at an average cost, and the sale is matched against this pooled cost.

This matters most for investors who've made regular purchases over time (e.g., monthly investing into the same fund or share) — the "cost" used for a given sale isn't necessarily what you paid for the specific shares you think you're selling, but is determined by these matching rules.

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Using Losses to Reduce the Bill

Some investors deliberately sell an underperforming holding at a loss in the same tax year as a gain specifically to reduce the taxable amount (sometimes called tax-loss harvesting). If you want to maintain exposure to the same investment, be aware that repurchasing the identical shares within 30 days triggers the bed-and-breakfasting rule, which would match the repurchase against the sale and could disallow the intended loss — waiting 30+ days, or buying a similar but not identical investment, avoids this.

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Reporting and Paying CGT on Shares

Gains must be reported via Self Assessment (if you already file one) or, if you don't otherwise need to file, via HMRC's "real time" Capital Gains Tax service, generally due by 31 January following the end of the tax year (this differs from UK residential property gains, which have a much tighter 60-day reporting window — that faster deadline does not apply to share sales).

Keep records of purchase confirmations, sale confirmations, and any dealing fees for at least the tax year of sale plus several years afterward, since HMRC can query calculations and the matching rules require accurate historical purchase data to apply correctly.