Key facts
- CGT rates on share disposals are 18% (basic rate) and 24% (higher rate) from 30 October 2024.
- The Annual Exempt Amount for 2025/26 is £3,000 per individual.
- HMRC uses three share matching rules to determine which shares you sold: same-day, 30-day, and the section 104 pool.
- Share disposals are reported on the SA108 (Capital Gains) pages of your Self Assessment tax return.
- Shares held in ISAs and pensions are exempt from CGT.
Overview: CGT on Share Disposals
When you sell, gift, or otherwise dispose of shares (including stocks, unit trusts, and OEICs), any profit you make is a chargeable gain and may be subject to Capital Gains Tax.[1]
CGT applies to shares in UK and overseas companies alike. The key factors that determine your tax liability are the size of the gain, the rate of CGT that applies to you, and whether any reliefs or exemptions are available.
Note: CGT applies to the gain (profit), not the total sale proceeds. If you sell shares for less than you paid, you make a capital loss, which can be used to reduce other gains.
CGT Rates on Shares (2025/26)
From 30 October 2024, the rates for gains on shares and other non-property assets were aligned with the residential property rates:[2]
| Taxpayer Band | Rate (from 30 Oct 2024) | Rate (before 30 Oct 2024) |
|---|---|---|
| Basic rate (taxable income up to £37,700) | 18% | 10% |
| Higher rate (taxable income £37,701–£125,140) | 24% | 20% |
| Additional rate (taxable income above £125,140) | 24% | 20% |
| Trustees and personal representatives | 24% | 20% |
Your CGT rate depends on your total taxable income for the year. To work out which rate applies, add your taxable income and your gains together. Any gains that fall within your remaining basic-rate band are taxed at 18%; the rest at 24%.
Calculating Your Gain on Shares
The basic calculation is:[4]
| Step | Description |
|---|---|
| 1 | Start with the sale proceeds (or market value if gifted) |
| 2 | Deduct the allowable cost of the shares (purchase price determined by the matching rules) |
| 3 | Deduct incidental costs of buying and selling (broker fees, stamp duty on purchase, etc.) |
| 4 | The result is your gain or loss on that disposal |
| 5 | Deduct the Annual Exempt Amount (£3,000 for 2025/26) from total net gains |
| 6 | Pay CGT at 18% or 24% on the taxable gain |
Worked Example
Sarah is a higher-rate taxpayer. In January 2026, she sells 500 shares in ABC plc for £20 each (£10,000 total). Her section 104 pool cost for those 500 shares is £6,000. She paid £50 in broker fees on the sale.
| Item | Amount |
|---|---|
| Sale proceeds | £10,000 |
| Less: allowable cost (section 104 pool) | −£6,000 |
| Less: selling costs (broker fee) | −£50 |
| Gain | £3,950 |
| Less: Annual Exempt Amount | −£3,000 |
| Taxable gain | £950 |
| CGT at 24% (higher rate) | £228 |
Share Matching Rules (Overview)
When you sell shares in a company where you have made multiple purchases at different times and prices, HMRC needs to determine which shares you sold to calculate the correct base cost. The share identification rules apply in this strict order:[3]
- Same-day rule: Shares sold are matched first with any shares in the same company bought on the same day as the sale.
- 30-day rule (bed and breakfasting): Next, shares are matched with acquisitions made within the following 30 days (on a first-in, first-out basis). This anti-avoidance rule prevents you from selling and immediately rebuying shares to crystallise a loss.
- Section 104 pool: Any remaining shares sold are matched against the section 104 holding — a single, pooled average cost of all your other shares in that company.
Tip: Understanding the matching rules is essential if you hold shares bought at different prices. For a full explanation with worked examples, see our detailed guide to Share Matching & Section 104 Pools.
Shares Exempt from CGT
Several categories of share-related investments are exempt from CGT:[1]
- ISA holdings: Shares held within a Stocks & Shares ISA are completely CGT-free
- Pension funds: Shares held within a SIPP or other registered pension are exempt
- EIS shares: Qualifying Enterprise Investment Scheme shares held for 3+ years are CGT-exempt
- SEIS shares: Qualifying Seed Enterprise Investment Scheme shares held for 3+ years are CGT-exempt
- VCT shares: Venture Capital Trust shares purchased as new issues are CGT-exempt
- UK Government gilts: Gilt-edged securities are exempt from CGT
- Qualifying corporate bonds: Most corporate bonds denominated in sterling are also exempt
Reporting Share Gains to HMRC
Unlike UK residential property disposals (which require a 60-day report), share gains are reported on your Self Assessment tax return for the relevant tax year.[4]
You use the SA108 (Capital Gains Summary) supplementary pages. Key points:
- You must report if total gains exceed the Annual Exempt Amount (£3,000 for 2025/26)
- You must also report if total disposal proceeds exceed £12,000 (4 × the AEA), even if there is no tax to pay
- The deadline for online Self Assessment is 31 January after the end of the tax year
- CGT on shares for 2025/26 is due for payment by 31 January 2027
Record keeping: You should keep records of all share purchases and sales, including contract notes, dividend reinvestment statements, and corporate action details. HMRC can enquire into returns for up to 4 years (or longer if fraud is suspected), so retain records for at least that period after the filing deadline.
Using Share Losses
If you sell shares at a loss, the loss is an “allowable loss” that can reduce your CGT bill:[2]
- Current year: Losses must be set against gains in the same tax year first, even if this reduces your gains below the AEA
- Carry forward: Unused losses can be carried forward indefinitely to offset gains in future years, but only to the extent that they reduce gains to the AEA level
- Negligible value: If shares become effectively worthless, you can make a negligible value claim to crystallise the loss without actually selling
Special Situations
Transfers Between Spouses & Civil Partners
Transfers of shares between spouses or civil partners who are living together are treated as taking place on a “no gain, no loss” basis. The receiving spouse takes on the original base cost.[2]
Corporate Actions
Share reorganisations, rights issues, bonus issues, and takeovers can all affect your CGT position. In most cases, a reorganisation is not treated as a disposal — instead, the new shares inherit the base cost of the old shares. Where cash is received as part of a reorganisation, a part disposal may arise.
Employee Share Schemes
Shares acquired through approved employee share schemes (EMI, CSOP, SIP, SAYE) have special CGT rules. See our guide to Employee Share Schemes & CGT for full details.
Frequently Asked Questions
How much CGT do I pay when I sell shares?
You pay 18% on gains that fall within your unused basic-rate band, and 24% on gains above that. The first £3,000 of gains in 2025/26 is covered by the Annual Exempt Amount and is tax-free. Your CGT rate depends on your total taxable income plus gains in the same tax year.
Do I have to report share sales to HMRC?
Yes, if your total gains exceed the Annual Exempt Amount (£3,000 for 2025/26) or if total disposal proceeds exceed four times the AEA (£12,000). You report share disposals on the SA108 pages of your Self Assessment return.
How does HMRC know which shares I sold?
HMRC applies share matching rules in a strict order: first, shares bought on the same day as the sale; second, shares bought within the following 30 days; and finally, shares from your section 104 pool (a running weighted-average of all other acquisitions).
Can I offset share losses against other gains?
Yes. If you sell shares at a loss, the loss can be offset against other capital gains in the same tax year. If your losses exceed your gains, the excess can be carried forward indefinitely to offset gains in future years.
Further Reading
- Share Matching & Section 104 Pools — detailed matching rules with worked examples
- CGT on Crypto & Digital Assets — similar pooling rules apply to cryptocurrency
- ISAs, Pensions & Tax-Free Wrappers — how to shelter investments from CGT
- Employee Share Schemes & CGT — CGT treatment of EMI, CSOP, SIP, and SAYE
- Capital Losses: How to Use Them — offsetting and carrying forward losses
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