Capital Gains Tax on Shares in the UK: Rates, Allowances and How to Calculate It (2026/27)

When you sell shares at a profit in the UK, you may owe capital gains tax (CGT) on that profit. The rules are not complicated once you understand the structure, but the rates and allowances have changed considerably over the last few years. This guide covers what applies in 2026/27.

What counts as a capital gain on shares?

A capital gain arises when you sell shares for more than you paid for them. The gain is the difference between your sale proceeds and your original cost (including dealing charges). You are taxed on the gain, not the total sale value.

For example: if you bought 500 shares at £4.00 each (£2,000) and sold them for £3,200, your gain is £1,200 (ignoring broker fees, which are deductible).

The annual CGT exempt amount in 2026/27

Every individual has an annual CGT exempt amount — gains below this threshold are tax-free. In 2026/27, the exempt amount is £3,000.

This is a significant reduction from the £12,300 exempt amount that applied until April 2023. If you were used to realising profits up to £12,000 a year tax-free, note that only £3,000 is now sheltered.

CGT rates on shares in 2026/27

Capital gains on shares (and other financial assets) are taxed at:

• 18% for basic-rate taxpayers (gains falling within the basic-rate band)
• 24% for higher and additional-rate taxpayers (gains above the basic-rate band)

Note: these rates increased from October 2024 (previously 10% basic rate, 20% higher rate). If your shares were sold before that date, earlier rates may apply.

Your tax rate depends on your total taxable income plus taxable gains in the tax year. If your income is £35,000 and the basic-rate band extends to £50,270, you have £15,270 of basic-rate band remaining. Gains up to that amount are taxed at 18%; anything above at 24%.

How to calculate your CGT on share sales

The basic calculation is:

1. Add up all capital gains from share sales in the tax year
2. Subtract any capital losses from the same year (or carried forward from previous years)
3. Subtract the annual exempt amount (£3,000)
4. Apply the applicable rate (18% or 24%) to the remaining taxable gain

Use our CGT calculator to run these numbers automatically based on your income and gains.

The share matching rules

HMRC uses specific matching rules to calculate your gain when you have bought the same shares at different times:

• Same-day rule: Shares bought on the same day as the sale are matched first
• 30-day rule (bed and breakfast rule): Shares bought within 30 days after a sale are matched next. This prevents you from selling shares to crystallise a loss and buying them back immediately
• S104 pool: Remaining shares are treated as a pool with an averaged cost price

The 30-day rule catches the “bed and breakfast” strategy where investors used to sell shares to use their CGT allowance, then rebuy immediately. The way around this is to use a spouse or civil partner, or to wait 30 days (accepting the market risk).

Shares held in an ISA: no CGT applies

Gains on shares held within a Stocks and Shares ISA are completely free from capital gains tax. If you hold shares in both an ISA and a general investment account, always consider selling the non-ISA shares first when you want to reduce CGT exposure.

The annual ISA allowance is £20,000 per tax year. Over time, transferring gains into an ISA wrapper (“bed and ISA”) is one of the most effective ways to reduce future CGT liability, though you will crystallise a gain on the transfer if the shares are already showing a profit.

Bed and ISA: sheltering gains from future CGT

“Bed and ISA” means selling shares in a general investment account and immediately buying the same shares inside an ISA. This crystallises a gain (which may be taxable now) but moves the shares into a tax-free wrapper for all future growth.

The maths often favours doing this even if you pay some CGT today, because you permanently shelter all future gains and dividends. It is especially valuable for shares you plan to hold long term.

Capital losses: how to use them

If you have made losses in a tax year, you can set them against your gains from the same year before applying the annual exempt amount. Unused losses carry forward indefinitely and can be used in future years — but you must report them to HMRC within four years of the loss year.

You can only offset losses against the exempt amount last, so losses are most valuable when your gains exceed £3,000.

Reporting and paying CGT

If your total gains exceed the exempt amount (£3,000) or your total proceeds exceed four times the exempt amount (£12,000), you must report via self-assessment. UK residents must also report within 60 days for residential property gains, though this does not apply to share sales.

CGT is due by 31 January following the end of the tax year in which the gain was made. So gains in 2025/26 (to 5 April 2026) are payable by 31 January 2027.

Use our capital gains tax calculator to see exactly how much CGT you owe on your share sales, based on your income, tax band, and gain amount.