UK Capital Gains Tax on Shares: How Much Will You Owe?

If you sell shares in the UK for a profit outside an ISA or pension, you pay Capital Gains Tax (CGT) on the gain above your £3,000 tax-free allowance. For the 2026/27 tax year, that gain is taxed at 18% if you're a basic-rate taxpayer or 24% if you're a higher- or additional-rate taxpayer. This guide breaks down exactly how the numbers work, with worked examples, so you know what to expect before you sell.

Selling shares can feel like a win — right up until you remember the taxman wants a share of the profit too. Whether you've cashed in a few individual stocks, sold a chunk of a fund, or are weighing up rebalancing your portfolio, understanding UK Capital Gains Tax on shares is essential before you click "sell." At CalZone, we help everyday investors build and manage their portfolios with confidence — and that means understanding the tax side, not just the trading side.

This guide covers everything you need to know about how Capital Gains Tax on shares works in the UK for 2026/27: the current rates, the tax-free allowance, how to calculate what you owe, and the legitimate ways to bring your bill down.

What Is Capital Gains Tax on Shares?

Capital Gains Tax (CGT) is a tax on the profit you make when you sell an asset that has increased in value — not on the total amount you receive from the sale. When it comes to shares, CGT applies when you dispose of shares held outside a tax-sheltered account, such as a stocks and shares ISA or a pension.

"Disposing" of shares doesn't just mean selling them for cash. HMRC also treats the following as disposals for CGT purposes:

• Selling shares on the open market
• Gifting shares to someone other than your spouse or civil partner
• Swapping shares for another asset
• Transferring shares into a trust

Your taxable gain is calculated as:

Gain = Sale proceeds − Purchase price − Allowable costs (e.g. broker fees, stamp duty)

For example, if you bought 1,000 shares at £5 each (£5,000) and later sold them for £8,000, your gain is £3,000 before costs. That £3,000 figure — not the £8,000 sale price — is what's potentially taxable. If you are comparing income distributions, check our Dividend Tax Calculator or calculate overall take-home earnings with our Salary Calculator UK.

UK Capital Gains Tax Rates on Shares (2026/27)

Since the October 2024 Budget, share gains are taxed at the same rates as most other assets, including residential property. Here's the current picture for the 2026/27 tax year:

Your gain is taxed according to which income tax band it falls into once it's added on top of your other income for the year. If part of your gain falls within your remaining basic-rate band, that portion is taxed at 18%; anything above that threshold is taxed at 24%.

It's worth pausing on how sharply this allowance has shrunk. The tax-free exempt amount was £12,300 as recently as the 2022/23 tax year. It was cut to £6,000, then to £3,000, and has held at £3,000 ever since — meaning far more investors now find themselves with a CGT bill than a few years ago, even on relatively modest gains. If you want to estimate your earnings tax-free brackets, check our Income Tax Calculator UK or the Dividend Tax Calculator.

Worked Example: Calculating CGT on Shares

Let's walk through a realistic scenario.

Sarah earns £45,000 a year from her job (which you can check on the Salary Calculator UK) and sells shares outside her ISA, realising a gain of £20,000 after deducting her original cost and dealing fees.

1. Subtract the annual exempt amount: £20,000 − £3,000 = £17,000 taxable gain
2. Work out her remaining basic-rate band: £50,270 − £45,000 = £5,270
3. Apply the rates:
   • £5,270 taxed at 18% = £948.60
   • Remaining £11,730 taxed at 24% = £2,815.20
4. Total CGT owed: £3,763.80

Notice that Sarah's gain is stacked on top of her income to determine which portion falls into which rate band — CGT isn't a flat percentage applied to the whole gain regardless of your earnings.

Do You Always Have to Pay CGT on Shares?

Not necessarily. Several common situations mean you won't owe any Capital Gains Tax on shares at all:

• Shares held in a stocks and shares ISA — all gains inside an ISA are completely free of CGT, no matter how large. You can calculate yields using our Stocks & Shares ISA Calculator.
• Shares held in a SIPP or workplace pension — gains inside pensions are also CGT-exempt.
• Gains below the £3,000 annual exempt amount — if your total gains for the tax year are under the threshold, there's nothing to pay.
• Transfers between spouses or civil partners — these are treated as "no gain, no loss" for CGT purposes, effectively doubling a couple's combined allowance to £6,000 when used strategically.
• Gains from certain SEIS-qualifying investments — up to 50% of gains on qualifying Seed Enterprise Investment Scheme shares can be exempt, subject to conditions.

This is precisely why so many investors choose to hold their portfolios inside a stocks and shares ISA where possible: it removes CGT from the equation entirely and simplifies your annual tax return. Compare this to regular savings returns with our Savings Calculator UK or the Compound Interest Calculator.

When Do You Need to Report and Pay?

You must report your share gains via Self Assessment if either of the following applies in a tax year:

• Your total taxable gains exceed the £3,000 annual exempt amount, or
• Your total sale proceeds exceed £50,000 (even if the gain itself is small)

Unlike residential property, there's no 60-day reporting rule for shares. Instead, CGT on shares is reported and paid alongside your normal Self Assessment return, with the deadline falling on 31 January following the end of the tax year in which you sold. For example, gains made in the 2026/27 tax year (6 April 2026 to 5 April 2027) are due for payment by 31 January 2028.

Legal Ways to Reduce Capital Gains Tax on Shares

You can't avoid CGT altogether if you're realising significant profits outside a tax wrapper, but there are several HMRC-recognised strategies that can legitimately reduce your bill.

1. Use Your ISA Allowance ("Bed and ISA")

Each tax year you can invest up to £20,000 into a stocks and shares ISA. A common strategy is "Bed and ISA" — selling shares held outside an ISA and immediately repurchasing the same holding inside one. This uses up some of your CGT allowance on the disposal but shelters all future growth from tax permanently. Check our ISA allowance calculator for limits.

2. Offset Losses Against Gains

If you've sold other shares at a loss during the same tax year, you can offset those losses against your gains before applying the annual exempt amount. Unused losses can be carried forward indefinitely — but you must report them to HMRC within four years of the loss occurring.

3. Use Both Spouses' Allowances

Because transfers between spouses and civil partners are exempt from CGT, couples can transfer shares between each other before selling, effectively doubling their combined tax-free allowance to £6,000 a year.

4. Time Your Disposals Across Tax Years

Rather than selling a large holding all at once, spreading the sale across two tax years (e.g. selling some shares in March and the rest in April) allows you to use two separate £3,000 allowances instead of one.

5. Consider Pension Contributions

Making a pension contribution can extend your basic-rate band for that tax year, potentially keeping more of your gain taxed at 18% rather than 24%. You can model tax thresholds using our Income Tax Calculator UK.

Shares vs. Other Assets: How CGT Compares

Since October 2024, the government aligned share CGT rates with those for residential property and most other assets — a significant simplification. Previously, shares and property sat in different rate bands entirely. Today:

• Shares, funds, crypto and most personal possessions: 18% / 24%
• Residential property (not your main home): 18% / 24% (you can estimate stamp duty on standard purchases using the Stamp Duty Calculator)
• Business Asset Disposal Relief (qualifying business shares): 18% (rising from 14% on 6 April 2026), up to a £1 million lifetime limit

Your main home is typically exempt entirely under Private Residence Relief, and it's a completely separate calculation from share disposals.

Maximise Your Portfolio Returns

Capital Gains Tax on shares catches out more investors every year as the tax-free allowance keeps shrinking. The good news is the rules are straightforward once you understand the structure: work out your gain, subtract £3,000, and apply 18% or 24% depending on your income band. The bigger opportunity is in the planning — using your ISA allowance, offsetting losses, and timing disposals sensibly can make a real difference to what you actually hand over to HMRC.

If you're building a share portfolio and want tools that make tracking your gains simple, explore our Capital Gains Tax Calculator or check your dividend tax rates with the Dividend Tax Calculator.