This guide explains UK Capital Gains Tax (CGT) rules for investors with brokerage accounts. It covers the HMRC share matching rules, Section 104 pooling, tax rates, and how to report CGT on your self-assessment tax return.
Capital Gains Tax is a tax on the profit you make when you sell (or "dispose of") an asset that has increased in value. For UK investors, this applies to shares, funds, ETFs, and other securities held in general investment accounts (not ISAs or SIPPs, which are exempt).
You pay CGT on your gains — the difference between what you paid for an asset and what you sold it for — not on the total proceeds.
From 30 October 2024, the CGT rates on shares and securities are:
| Income Tax Band | CGT Rate on Shares |
|---|---|
| Basic rate taxpayer | 18% |
| Higher / additional rate taxpayer | 24% |
Your CGT rate depends on your total taxable income plus your capital gains. Gains that fall within the basic rate band are taxed at 18%; gains above the basic rate threshold are taxed at 24%.
HMRC uses specific rules to determine which shares you have sold when you hold multiple purchases of the same stock. These rules prevent artificial tax avoidance and must be applied in strict order:
If you buy and sell the same shares on the same day, the buy is matched against the sell first. This means you cannot create an artificial loss by selling and immediately repurchasing shares on the same day.
If you sell shares and then buy the same shares within 30 days, the subsequent buy is matched against the earlier sell. This prevents the "bed and breakfast" strategy where investors would sell near the end of the tax year to crystallise a loss, then immediately repurchase.
Shares not matched by the above rules go into a "Section 104 pool" — a single pool per security that tracks your total quantity and total cost in GBP. When you sell, the cost is calculated as a proportional share of the pool's average cost.
The pool adjusts whenever you buy or sell shares: buys increase the quantity and cost; sells reduce them proportionally.
UK Government gilts (bonds issued by HM Treasury, with symbols like UKT) are exempt from Capital Gains Tax. Gains and losses on gilts do not need to be reported.
ISA and SIPP accounts are entirely outside CGT. Only trades in general investment accounts (GIA) are subject to CGT.
All CGT calculations must be done in GBP. If you hold US stocks (or stocks in other currencies), you must convert both the cost and proceeds to GBP using the exchange rate on the date of each transaction.
HMRC accepts the use of published exchange rates (e.g., HMRC's own rates or published market rates) for this conversion. Our calculator uses daily USD/GBP and EUR/GBP rates for accurate conversion.
You must report CGT on your Self Assessment tax return (SA100 with supplementary pages SA108) if:
The UK tax year runs from 6 April to 5 April. You must report and pay any CGT by 31 January following the end of the tax year (e.g., 31 January 2027 for the 2025-26 tax year).
Upload your brokerage activity files and our free calculator will apply all HMRC rules automatically — same-day matching, bed & breakfast rule, and Section 104 pooling.
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