Do I pay Capital Gains Tax when selling shares?

Yes. Capital Gains Tax on shares may apply when you sell shares or investments for a profit. The tax is calculated on your gain after deducting allowable costs, losses and available exemptions.

How is Capital Gains Tax on shares calculated?

Tax on selling shares is calculated by subtracting the original purchase cost and allowable expenses from the sale proceeds. The remaining gain may be subject to CGT after applying your annual exempt amount.

What is the Capital Gains Tax rate on shares for 2026/27?

The Selling shares Capital Gains Tax rate depends on your Income Tax band. For 2026/27, gains are generally taxed at 18% for basic-rate taxpayers and 24% for higher-rate taxpayers.

Can I reduce Capital Gains Tax when selling shares?

Yes. You may be able to reduce your share disposal tax liability by using your annual exempt amount, claiming allowable costs, offsetting capital losses and planning the timing of disposals.

Are shares held in an ISA subject to Capital Gains Tax?

No. Shares and investments held within an ISA are generally exempt from Capital Gains Tax on shares, meaning you do not pay CGT on gains made inside a tax-efficient ISA.

Can I use losses from shares against other gains?

Yes. If you make a loss when selling shares, you may be able to use Capital Gains Tax losses against other taxable gains in the same or future tax years.

Can an accountant help with tax on selling shares?

Yes. An accountant can help calculate your tax on selling shares, identify available reliefs and losses, and ensure your share disposal tax is reported correctly to HMRC.

Capital Gains Tax on Shares: Tax Rules When Selling Shares in 2026/27

Capital Gains Tax on shares applies when you sell shares or investments that have increased in value and the gain exceeds your available exemptions and allowances. Understanding how tax on selling shares works is important for investors because the amount of tax payable depends on your gain, income position, available losses and whether any exemptions apply. Shares can be an effective way to build long-term wealth, but selling investments outside tax-efficient accounts can create a Capital Gains Tax liability. The rules around Selling shares Capital Gains Tax calculations have changed in recent years, including reductions to the annual exemption and changes to CGT rates. For the 2026/27 tax year, individuals have a Capital Gains Tax Annual Exempt Amount of £3,000. This means the first £3,000 of total taxable gains made during the tax year may be free from CGT before applying the relevant tax rates. These rates sit alongside the wider Income Tax rules explained in our ultimate guide to personal tax in the UK. This guide explains how Shares and Capital Gains Tax work, how to calculate gains, what costs can be deducted and how to report a share disposal tax liability to HMRC.

Calculate Your Capital Gains Tax

Do you pay Capital Gains Tax when selling shares?

You may need to pay Capital Gains Tax when you sell shares that have increased in value since you purchased them. CGT is not charged on the full sale proceeds. Instead, it applies to the profit made after deducting allowable costs and available reliefs. For example, if you buy shares for £20,000 and later sell them for £35,000, the starting point for your calculation is a £15,000 gain before considering any allowable costs, losses or exemptions. You may need to consider Capital Gains Tax on shares where you:

Sell shares in a company.
Dispose of investment funds.
Sell shares received through employee share schemes.
Transfer certain investments.
Dispose of shares held outside tax-efficient accounts.

However, not every share disposal creates a CGT liability. Some investments benefit from specific exemptions or tax advantages. A closer look at the circumstances where you don’t have to pay Capital Gains Tax at all can help clarify whether any of these apply to your particular disposal.

How Capital Gains Tax on shares works

When calculating CGT on shares, you need to determine the difference between the disposal value and the allowable cost of acquiring the shares. The basic calculation is: Sale proceeds – purchase cost – allowable expenses = capital gain After calculating the gain, you then consider:

Available capital losses.
The Annual Exempt Amount.
The applicable CGT rate.

For a wider explanation of CGT rates and allowances, see our guide on UK Capital Gains Tax rates and allowances.

Tax rates on selling shares in 2026/27

The CGT rates applying to shares and other taxable assets depend on your income position for the tax year.

Taxpayer position	CGT rate on shares
Basic-rate taxpayer	18%
Higher or additional-rate taxpayer	24%

Your capital gains are added on top of your taxable income when determining which CGT rate applies. This means an individual with unused basic-rate Income Tax band may pay CGT at the lower rate on part of their gain, while any remaining gain may be taxed at the higher rate. Recent Capital Gains Tax new rates introduced changes to the CGT treatment of many assets, bringing shares and other investments in line with residential property CGT rates.

Understand Share Disposal Rules

How to calculate Capital Gains Tax on shares

To calculate your Selling shares Capital Gains Tax liability, follow these steps:

Step 1: Calculate the gain on each share disposal

For each disposal, calculate:

The amount received from selling the shares.
The original purchase cost.
Any allowable buying or selling costs.

Step 2: Combine your gains and losses

If you sold multiple investments during the same tax year, combine all gains and losses to calculate your overall position.

Step 3: Apply allowances and reliefs

Deduct any available capital losses and then apply the Annual Exempt Amount where available. For a broader walkthrough covering other asset types too, our guide on working out capital gains sets out the same principles step by step.

Allowable costs when selling shares

Certain costs can reduce the taxable gain when calculating tax on selling shares. Allowable costs may include:

Stockbroker fees.
Transaction charges.
Stamp Duty Reserve Tax paid when purchasing shares.
Professional costs directly connected with the disposal.

You should keep supporting records for all costs claimed because HMRC may request evidence during a compliance check.

Shares held within an ISA and CGT

Shares held within a Stocks and Shares ISA are generally exempt from Capital Gains Tax. This means:

Investment growth within the ISA is not normally subject to CGT.
Share disposals within the ISA do not usually create a CGT reporting requirement.
Future investment gains can benefit from tax-efficient treatment.

Explore Available CGT Reliefs

Using capital losses against share gains

If you sell shares at a loss, the loss may be available to reduce gains made on other investments. For example, if you make a £25,000 gain from selling one group of shares but a £10,000 loss from another investment, your taxable gain may be reduced to £15,000 before applying the Annual Exempt Amount. Understanding how to use Capital Gains Tax losses can help investors reduce future tax liabilities.

When is Capital Gains Tax not payable on shares?

There are several situations where CGT may not be payable on shares. This may include:

Gains covered by the £3,000 Annual Exempt Amount.
Shares held within an ISA.
Disposals where available losses remove the taxable gain.
Certain qualifying investments that benefit from specific reliefs.

Reporting and paying CGT on share sales

If you have taxable gains from selling shares, you may need to include them on your Self Assessment tax return. The reporting process generally involves:

Calculating the gain.
Including details within your tax return where required.
Paying the CGT due by the relevant deadline.

The rules covering how to report and pay Capital Gains Tax apply slightly differently depending on the asset sold, so it’s worth checking the process in more detail before your Self Assessment deadline. For most share disposals, CGT is normally payable by 31 January following the end of the tax year in which the gain occurred.

Stay Compliant With HMRC

Common mistakes with share disposal tax

Common mistakes when dealing with Shares and Capital Gains Tax include:

Using outdated CGT rates.
Forgetting the reduced Annual Exempt Amount.
Failing to include allowable transaction costs.
Ignoring available capital losses.
Assuming all investments are automatically tax-free.

Example: selling shares and calculating CGT

Emma purchases shares for £30,000 and later sells them for £55,000. She pays £1,000 in allowable transaction costs. The calculation is:

Sale proceeds: £55,000.
Less purchase cost: £30,000.
Less allowable costs: £1,000.
Capital gain: £24,000.
Less Annual Exempt Amount: £3,000.
Taxable gain: £21,000.

The final CGT liability depends on Emma’s income position and whether the gain falls within the basic-rate or higher-rate CGT band.

Key takeaways

Capital Gains Tax on shares applies when investments increase in value and are sold outside tax-efficient accounts. Understanding how gains are calculated, which costs can be deducted and which allowances apply helps investors manage their tax position effectively. With the current reduction in the Annual Exempt Amount and updated CGT rates, reviewing investments before selling shares has become increasingly important. By keeping accurate records, using available allowances and understanding share disposal tax rules, investors can ensure they meet HMRC requirements while making informed decisions.

Book a Capital Gains Tax Review

Case Study: Planning Share Disposals to Reduce Unnecessary CGT Costs

Daniel visited our Farringdon office after deciding to sell a portfolio of shares held outside an ISA and wanted to understand his potential Capital Gains Tax on shares liability before completing the disposals. He was unsure how to calculate the gain, which investment costs could be deducted and whether using available allowances and losses could reduce the amount of tax payable.

During the consultation, we reviewed Daniel’s share purchase records, broker statements and planned sale transactions to prepare an accurate share disposal tax calculation. We explained how tax on selling shares is calculated by deducting the original purchase cost, allowable transaction costs and any available capital losses before applying the £3,000 Annual Exempt Amount for 2026/27. We also reviewed the difference between shares held within and outside an ISA, explained the current CGT rates and discussed the importance of reporting taxable gains correctly to HMRC.

Following the review, Daniel gained a clearer understanding of how Shares and Capital Gains Tax interact, identified the deductions and reliefs available to him and was able to make informed decisions about the timing of his share disposals while remaining compliant with HMRC requirements.