When you owe CGT on shares
You owe capital gains tax in the UK when you sell, gift, or otherwise dispose of shares and the gain on the disposal is bigger than your annual exempt amount. The gain is the sale price minus what you originally paid (your "base cost"), minus allowable transaction costs like broker fees.
For 2026/27, the annual exempt amount is £3,000. So if your total net gains for the tax year are under £3,000, you owe nothing and you don't usually need to report. Anything above £3,000 is taxable.
The rates
For shares, crypto and most other assets, capital gains tax for 2026/27 is:
- 18% if the gain falls inside your unused basic-rate income tax band.
- 24% if the gain is above the basic-rate threshold (i.e. you're already a higher-rate taxpayer, or the gain pushes you into the higher-rate band).
The CGT bands work the same way as income tax: the gain stacks on top of your other income for the year. If your salary takes you to within £5,000 of the higher-rate threshold and you realise a £20,000 gain, the first £5,000 of that gain is taxed at 18% and the remaining £15,000 at 24%.
The 30-day rule (bed-and-breakfasting)
Before 1998, investors used to sell shares to crystallise a gain (or loss) and immediately buy them back. HMRC closed that loophole. Today, if you sell shares and buy back thesame shares in the same company within 30 days, the new acquisition is matched against the old disposal. You don't get to crystallise the gain or loss freely.
The same applies to most cryptocurrencies and similar fungible assets. If you sell BTC today and buy BTC back tomorrow, HMRC treats the new buy as cancelling the sale for CGT purposes.
The work-around investors use is called Bed and ISA, sell from the general account, then re-buy the same shares inside an ISA or your spouse's ISA within your annual ISA allowance. The 30-day rule doesn't apply because the new acquisition is a different beneficial owner / wrapper.
Wrappers that change everything
The single biggest decision an individual investor makes about CGT is which wrapper to hold their investments in:
- Stocks & Shares ISA. No CGT on gains, no income tax on dividends. £20,000 annual allowance for 2026/27. The default home for most retail investing in the UK.
- Self-Invested Personal Pension (SIPP). No CGT on gains, no income tax on dividends inside the wrapper. Withdrawals are taxed as income later, so it's a tax-deferral wrapper rather than a tax-free one, but the £60,000 annual allowance dwarfs the ISA.
- General Investment Account (GIA). The default if you don't use a wrapper. Subject to all the rules in this guide. Useful when you've maxed your ISA and SIPP, or when you need access to capital before age 55/57.
For most people building long-term equity exposure, the correct sequence is: max the workplace pension match, max the ISA, then top up the SIPP, and only then use a GIA. Doing it in that order minimises tax friction over decades.
Splitting gains across tax years
Because the £3,000 annual exempt amount can't be carried forward, use it or lose it , there's a simple optimisation if you're realising a large gain. Sell part of the position before 5 April and the rest after 6 April. You get two annual allowances, and if you'd have crossed the basic-rate band, splitting may keep more of the gain at 18% rather than 24%.
The Afterax capital gains calculator shows the exact saving from splitting your gain across two years for any specific scenario.
Losses are useful
Capital losses offset gains. If you have a stock that's down significantly, realising the loss in a year you also have gains can wipe out the tax bill. Unused losses carry forward indefinitely against future gains, but only if you report them to HMRC within four years of the tax year in which they arose.
One nuance: losses must offset same-year gains first before you can use the annual exempt amount. So if you have £5,000 of losses and £10,000 of gains, you net to £5,000 of gain, and you still have your £3,000 allowance available against it. Final taxable amount: £2,000.
Reporting
For shares and most non-property assets, you report CGT through your Self Assessment tax return. You need to report if any of the following are true:
- Total taxable gains exceed the £3,000 annual exempt amount.
- Total proceeds from disposals exceed £50,000 in the tax year (even if no tax is due).
- You want to claim losses to carry forward.
UK residential property disposals are different: they must be reported and the tax paid within 60 days of completion through HMRC's Capital Gains Tax on UK Property service, separate from Self Assessment.
Quick reference
- Annual exempt amount: £3,000 (2026/27).
- Basic-rate CGT on shares: 18%.
- Higher-rate CGT on shares: 24%.
- 30-day rule: same-share repurchases within 30 days are matched against the disposal.
- ISA allowance: £20,000 per tax year. CGT-free.
- SIPP allowance: £60,000 per tax year (subject to taper). CGT-free inside the wrapper.
- Reporting: Self Assessment for shares; 60-day return for residential property.
Use the capital gains tax calculator to see exactly what you'd owe on a given gain, and the ISA vs general account comparison to see how much wrapper choice matters over a long horizon.