How capital gains tax works on shares
The 2026/27 annual exempt amount, the 18% and 24% rates, and the order HMRC uses to match a share sale.
A gain is not the sale price
These figures are estimates. They are not tax advice and they are not financial advice. Capital Gains Tax is charged on the gain, which for a straightforward sale is the proceeds minus what the shares cost minus the allowable costs of buying and selling. A broker’s charge on the purchase is part of the cost. A charge on the sale comes off the proceeds.
For 2026/27 an individual then has an annual exempt amount of £3,000. It is an allowance, not a bill you can reclaim if the gain is smaller. Losses you make in the same tax year are deducted even if that uses the allowance up. Losses brought forward from earlier years are used only to bring the gain down to £3,000, and the rest waits for a later year.
18% until the basic-rate band is used, then 24%
What remains is taxed at 18% while it still fits in the unused basic-rate band, and at 24% after that. The band on the Capital Gains Tax rates page for 2026/27 is £37,700 of taxable income. Taxable income is your income minus the Personal Allowance and any other Income Tax reliefs. This site’s calculator deducts the Personal Allowance, including the taper that starts at £100,000, and it does not deduct other reliefs. It uses that £37,700 figure rather than the Scottish Income Tax bands.
GOV.UK’s worked case is taxable income of £20,000 and a gain of £12,600. After the £3,000 allowance, £9,600 is left. £20,000 plus £9,600 is £29,600, which is inside £37,700, so the tax is £9,600 at 18%, which is £1,728. A larger gain of £52,600 uses the rest of the band, £17,700 at 18% (£3,186), and £31,900 at 24% (£7,656). The tax is £10,842. From 6 April 2026 those two rates are the rates for residential property as well as for shares. The capital gains tax calculator runs both examples.
Which shares are treated as the ones you sold
If you bought the same class of share on more than one day, the sale is not matched with the oldest holding first. From 6 April 2008 the order is: shares acquired on the same day as the sale, then shares acquired in the 30 days after the sale, then the Section 104 pool of everything else. Same-day purchases are a single acquisition. Shares that match the same day or the next 30 days never join the pool.
That 30-day rule is why selling and buying back inside a month does not crystallise the old gain against the old pool. A sale on 1 July and a repurchase on 31 July are 30 days apart, so the new shares are the ones treated as sold. The pool you already held is unchanged. The cost of a pool disposal is the pool’s allowable cost multiplied by the number sold and divided by the number in the pool, rounded to the nearest penny.
HMRC’s pooling example
CRYPTO22255 is written about tokens, and the identification rules are the same ones used for shares. The person already holds 14,000, acquired for £200,000. On 30 August they sell 4,000 for £160,000. On 11 September they buy 500 for £17,500. The manual leaves the year as 20XX.
The 500 bought in September match the sale first, at their £17,500 cost. The other 3,500 come out of the pool. The pool cost of those 3,500 is £200,000 × 3,500 / 14,000, which is £50,000. Proceeds £160,000 minus £17,500 minus £50,000 is a gain of £92,500. The pool left is 10,500, with £150,000 of cost still attached. The calculator’s share mode loads those figures and shows each match on its own row. If that gain is your only one, and your taxable income is £20,000, the £3,000 allowance and the 18% and 24% split then apply to the £92,500.
What never belongs in the calculation
Gains on shares in an ISA or a PEP are exempt. So are investments held for a registered pension scheme. Do not type them into the calculator. Carried interest received from 6 April 2026 is charged to Income Tax and National Insurance, not Capital Gains Tax. A gain on your only or main home is usually covered by Private Residence Relief, and that relief is not worked out here.
Business Asset Disposal Relief is a different 18% rate, from 6 April 2026, for qualifying business disposals, up to £1 million of gains over a lifetime. Ordinary listed shares do not qualify just because you have held them. The calculator will apply the relief only if you say the disposal qualifies, and it will not check the conditions for you. Growth that has not been sold is not a capital gain at all: the compound interest calculator projects a balance, and it does not deduct tax.