UK CGT on Shares 2026/27: Rates & Pooling Traps

The Rates, in One Table

Since 30 October 2024 the same two rates apply to shares, funds and ETFs. The old 10% and 20% rates are gone.

The figure that trips people up is the threshold. Your gain stacks on top of your income, and it is the £50,270 point that decides the split: the £37,700 basic-rate band plus the £12,570 personal allowance. Say your taxable income (after the personal allowance) is £35,000 and your gain after the exempt amount is £5,000. Your income has already used £35,000 of the £37,700 basic-rate band, leaving £2,700 of headroom - so £2,700 of the gain is taxed at 18% and the remaining £2,300 at 24%.

The £3,000 annual exempt amount is separate from your income tax allowance, and you lose it if you do not use it - there is no carry-forward. It was £12,300 in 2022/23. Two cuts later it sits at £3,000, frozen until at least 2030. So the planning around it matters more every year.

How the Gain Is Worked Out

The headline sum is simple. Gain = proceeds − allowable costs, where allowable costs are what you paid for the shares plus dealing fees and the 0.5% stamp duty on purchase.

It stops being simple the moment you have bought the same share more than once. HMRC does not let you pick which batch you sold. Instead it averages them all into a Section 104 poolHMRC's method for valuing shares of the same class bought at different times. All purchases are averaged into one pooled cost per share, used to work out the gain when you sell. - one running average cost per share across every purchase (TCGA 1992 s104). Two narrow exceptions override the pool: a sale is matched first against any purchase on the same day, then against purchases in the 30 days following the sale. That second rule is the one that catches people selling and rebuying to use their allowance - we cover it in full in the Bed & Breakfast rule guide.

That is the version every guide gives you. The next three sections are the ones they tend to skip - and they are where the real money is lost.

Working out the actual figure? See how to calculate CGT on shares, step by step, with the pooling and rate-split maths worked through end to end.

The Pooling Trap: Accumulation Funds and ETFs

This is the most expensive mistake on the page, and almost nobody warns you about it.

If you hold accumulation unitsFund or ETF units that reinvest income instead of paying it out. The reinvested income is still taxed each year and must be added to your Section 104 cost, or you overpay CGT on sale. (a fund or ETF that reinvests income instead of paying it out), that reinvested income is still taxed as income each year. HMRC calls it a notional distributionIncome an accumulation fund reinvests on your behalf. HMRC treats it as if distributed and taxes it each year, so you add it to your base cost to avoid being taxed on it twice.. Because you have already paid tax on it, you are allowed to add it to the cost of your holding, so it is not taxed a second time as a gain when you sell (HMRC CG57707). Miss that step and you inflate your own gain.

A worked example shows the size of it. You hold a fund with a pool cost of £8,000. Over the years it has accumulated £150 of reinvested income, all declared and taxed as you went. You sell for £10,000.

• Get it wrong: gain = £10,000 − £8,000 = £2,000.
• Get it right: cost becomes £8,150, so the gain is £1,850.

That £150 is small here. Over a decade of monthly contributions into an accumulating global tracker it is not - and it compounds silently, because nothing on your statement flags it. Offshore reporting funds carry the same trap under a different name, Excess Reportable IncomeExcess Reportable Income: Undistributed income from an offshore reporting fund that is taxable each year even though you never received it. It is added to your base cost so it is not taxed again as a gain., which you also add to your base cost for exactly the same reason. The cleanest fix is to keep a running cost record from the day you buy, not to reconstruct it years later from broker PDFs.

So where do these figures come from? For a UK-based accumulation fund, the reinvested income lands on the consolidated tax certificateCTC: The annual statement your investment platform sends summarising the interest, dividends and reinvested income on your account - used to complete your tax return. your platform sends after the tax year ends. Excess Reportable Income is the awkward one: it is not on your broker statement at all. The fund manager publishes it, typically as a PDF on their website a few months after the fund's year end, and your share is simply the units you held times the figure they quote. You owe tax on it even though nothing was paid to you - which is precisely why it slips through.

Employee Shares: Your Base Cost Is the Vesting Value

If you are paid in RSUsRestricted Stock Unit: A form of employee share pay. The market value when the shares vest is taxed as employment income, and that value becomes your base cost for Capital Gains Tax on later growth. (restricted stock units) or other employee shares, there is one number to get right, and getting it wrong means paying tax twice on the same money.

When RSUs vest, their market value on that day is taxed as employment income, through PAYE, with National Insurance on top. That same value becomes your CGT base cost (TCGA 1992 s119A). You are only taxed again, as a capital gain, on growth after vesting.

Got your shares through work - RSUs, EMI, CSOP or Sharesave? How each scheme is taxed before it ever reaches CGT, and the base-cost number to carry across, is set out in our guide to how employee share schemes are taxed.

So if shares vest at £20 each and you sell two years later at £28, the gain is £8 a share. Not £28. The £20 was already taxed as income; counting it again hands HMRC tax you do not owe. One wrinkle worth knowing: if your employer sells some shares at vesting to cover the tax (a "sell to cover"), that disposal can interact with the same-day and 30-day matching rules, so the dates matter.

Foreign and US Shares: the Exchange-Rate Trap

Hold US or other overseas shares and the gain is not worked out in dollars. It is worked out twice in sterling, once on the way in and once on the way out, and the two exchange rates need not agree.

HMRC requires you to convert the purchase cost to pounds at the spot rate on the day you bought, and the sale proceeds at the spot rate on the day you sold (HMRC CG78310). If the pound weakened in between, a position that lost money in dollars can still show a taxable gain in sterling. It feels wrong. It has been settled law since Bentley v Pike [1981] 53TC590, and the courts have backed HMRC every time since.

The practical points: use a defensible daily rate (the Bank of England or a published source such as HMRC's own monthly rates), keep the rate you used with your records, and remember it cuts both ways - a strengthening pound can shrink a dollar gain too.

When You Actually Have to Report

You need to tell HMRC about your share gains if either of these is true:

• your total gains for the year are above the £3,000 exempt amount, or
• your total proceeds for the year are above £50,000, regardless of whether you made a gain.

That £50,000 figure is worth a footnote, because plenty of older guides still get it wrong. It is a fixed limit set from 2023/24. Before then the reporting trigger was four times the annual exempt amount, which moved with the allowance - that rule is gone.

For a sale in 2026/27 (6 April 2026 to 5 April 2027), the Self Assessment deadline is 31 January 2028, reported on the SA108 pages. You can also use HMRC's real-time CGT service to report and pay during the year. Shares have no 60-day clock - that one is for residential property, and we cover it separately in the property CGT reporting guide.

Cutting the Bill, Legitimately

Four moves do most of the work:

• Use your ISA. Gains inside a Stocks & Shares ISAIndividual Savings Account: A tax-free wrapper. Gains and income on investments held inside an ISA are free of Capital Gains Tax and dividend tax. The annual subscription allowance is £20,000. are exempt, full stop. Moving existing holdings in is a Bed & ISA, and it sidesteps the 30-day rule because an ISA is a different legal capacity.
• Use your spouse. Transfers between spouses and civil partners are tax-free, which doubles the exempt amount to £6,000 and can move a gain into a lower band. See Bed & Spouse.
• Bank your losses. Losses offset gains in the same year and then carry forward indefinitely - but only if you report them within 4 years of the tax year they fell in.
• Harvest the allowance. Realise enough gain each year to use the £3,000, since it does not roll over. Just watch the 30-day rule if you mean to rebuy.

Pensions belong on the list too: gains inside a SIPP or workplace scheme are exempt, and over a long horizon that shelter beats an ISA.

Selling Your Own Company: BADR

Different rules apply if you are selling shares in your own trading company - at least 5% of shares and votes, held for 2 years. Business Asset Disposal ReliefBusiness Asset Disposal Relief: A reduced Capital Gains Tax rate on qualifying disposals of your own trading business, up to a £1m lifetime limit. The rate is 14% in 2025/26 and 18% from 6 April 2026. charges a reduced rate on qualifying gains up to a £1,000,000 lifetime limit.

The rate is rising. It is 14% for disposals up to 5 April 2026 and 18% from 6 April 2026 (GOV.UK Business Asset Disposal Relief). Even at 18% it undercuts the 24% headline rate - worth up to £60,000 across the full lifetime limit. If a sale is close to the April line, the date you complete is worth real money.