CGT rules for shares in 2025/26
UK Capital Gains Tax on shares applies whenever you dispose of shares (sell, gift to anyone other than a UK-domiciled spouse, exchange in a takeover, or emigrate). The taxable gain is sale proceeds minus allowable cost (purchase price + dealing costs + stamp duty 0.5% on UK shares).
Rate structure (post 30 October 2024):
- Annual Exempt Amount: £3,000 — every gain up to this is tax-free.
- Basic rate: 18% on gains in the basic-rate band when stacked on income.
- Higher rate: 24% on gains above the basic-rate threshold.
- (Pre-30-Oct-2024 rates were 10% / 20% — apportioning is needed for gains realised before/after that date.)
Share-matching rules apply where you bought and sold the same security at different times:
- Same-day rule — purchases on the day of sale match first.
- 30-day rule (bed & breakfast) — purchases within 30 days after the sale match next.
- Section 104 pool — everything else goes into a pooled average cost.
The 30-day rule was introduced specifically to prevent the old "bed and breakfast" trick of selling on 5 April and rebuying on 6 April to crystallise the AEA. To still bank the AEA, you can sell and rebuy in your spouse's name (different person), or sell and use the proceeds to buy the equivalent ETF rather than the same share.
Allowable losses and reliefs
Capital losses are valuable and should be claimed even in years when you owe no CGT. Current-year losses are netted against current-year gains before the AEA, which can waste the AEA. To preserve the AEA when you have small losses, time the loss realisation across tax years where possible.
Carried-forward losses are netted only after the AEA, so they don't waste it. Losses from prior years stay on your record indefinitely until used (claim must be made within 4 years of the loss arising).
Investors' Relief reduces the rate to 14% (from 6 April 2025; was 10% before) on gains up to a £1m lifetime allowance for shares in unlisted trading companies held for at least 3 years (specific qualifying conditions apply). Business Asset Disposal Relief (the rebrand of Entrepreneurs' Relief) gives 14% (from 6 April 2025; rising to 18% from 6 April 2026) on a £1m lifetime allowance for qualifying business disposals.
Three worked examples (UK 2025/26)
Example 1: Higher-rate investor, £15k gain on shares
Marcus earns £80,000 and sells shares for a £15,000 gain after fees in 2025/26.
Calculation: Gain £15,000 − £3,000 AEA = £12,000 taxable. Stacked on income (he's already in higher rate), all of it falls in higher-rate CGT at 24% = £2,880. Net £12,120.
Example 2: Basic-rate investor straddling bands
Emma earns £45,000 and sells shares for an £18,000 gain.
Calculation: Gain £18,000 − £3,000 AEA = £15,000 taxable. Stacked: she has £5,270 of basic-rate band remaining (£50,270 − £45,000). So £5,270 at 18% = £948.60, and £9,730 at 24% = £2,335.20. Total CGT £3,283.80. Net gain £14,716.20.
Example 3: Loss harvesting + ISA bed
Paul holds a fund showing a £4,000 unrealised loss. He sells it on 4 April and rebuys an equivalent ETF (different ISIN) on 5 April to lock the loss without the 30-day matching applying.
Calculation: £4,000 loss carried forward. The next year he sells another holding for an £8,000 gain. Apply £3,000 AEA first → £5,000 taxable, then deduct £4,000 carried-forward loss → £1,000 taxable at his marginal CGT rate. If higher rate: £240 CGT. Without the harvest, he would have paid £1,200 (£5,000 × 24%). Saving £960.
Common mistakes to avoid
- Forgetting the Annual Exempt Amount fell from £6,000 (2023/24) to £3,000 (2024/25 onwards).
- Assuming the 30 October 2024 rate change is retroactive — gains realised before that date use the old 10/20% rates.
- Ignoring share matching rules — same-day, then bed & breakfast 30-day, then Section 104 pool — wrong matching gives wrong base cost.
- Not deducting allowable costs — broker fees, stamp duty (0.5%), and acquisition costs reduce the gain.
- Missing spousal transfers — gifts to a UK-domiciled spouse use no AEA and reset the base cost rules.
- Forgetting losses — current-year losses must be offset before the AEA; carried-forward losses are claimed only after AEA.
When to use this calculator
Run this calculator before every share sale, especially around the tax-year end (5 April) when banking the AEA matters most. Use it to plan loss harvesting (sell losers to offset winners), to evaluate gifting shares to a UK-domiciled spouse (gift is at no gain/no loss; future sale uses spouse's AEA), and to compare encashment vs ISA-Bed (sell taxable, rebuy inside ISA to shelter future gains).
Regional differences (Scotland, Wales, Northern Ireland)
Income tax bands differ in Scotland (Starter 19%, Basic 20%, Intermediate 21%, Higher 42%, Advanced 45%, Top 48%). However, savings interest, dividends, and capital gains are taxed at UK-wide rates regardless of where you live, because these are reserved (non-devolved) tax categories. Wales uses UK rates for income tax (the Welsh rate is currently 10p matched to UK basic rate). Northern Ireland uses UK rates throughout. Your Personal Savings Allowance, Dividend Allowance, and Annual Exempt Amount are identical across all UK nations.