How much is the Capital Gains Tax on shares? | 2026/27 UK Guide

When advising clients on the disposal of an investment portfolio, practitioners must accurately determine exactly how much is the Capital Gains Tax on shares. For the 2026/27 tax year, the UK government has significantly overhauled the capital gains tax (CGT) framework, introducing new main rates and aligning the rates of key business reliefs.

To calculate the exact CGT liability on a disposal of shares, you must apply the correct statutory rate, deduct the annual exempt amount, correctly identify the shares sold using the matching rules, and ensure the gain is reported on time.

The Main Capital Gains Tax Rates on Shares (2026/27)

The Finance Act 2025 introduced increased main rates of CGT for disposals made on or after 30 October 2024, which remain in force for the 2026/27 tax year. Section 7 of the Finance Act 2025 amended section 1H(3) of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) to set the rates for gains other than residential property or carried interest.

When you sell shares, the amount of CGT you pay depends on your UK income tax bracket:

• Basic Rate Taxpayers: You pay 18% on gains that fall within your unused basic rate income tax band.
• Higher and Additional Rate Taxpayers: You pay 24% on any gains that exceed the basic rate band.

For trustees and the personal representatives of deceased persons, the legislation mandates a flat rate of 24% on chargeable gains arising from the disposal of shares.

The Annual Exempt Amount

Before calculating the tax at the 18% or 24% rate, you must deduct the Annual Exempt Amount (AEA) from your total chargeable gains.

For the 2026/27 tax year, section 1K(2) of TCGA 1992 confirms the annual tax-free allowance for individuals is £3,000.  You deduct this £3,000 from your gains after you offset any current year losses, but before you apply any allowable losses brought forward from previous tax years.

Business Asset Disposal Relief and Investors’ Relief (2026/27 Rates)

If the shares qualify for specific business reliefs, different rates apply. However, from 6 April 2026, the tax advantage of these reliefs changes significantly.

• Business Asset Disposal Relief (BADR): For disposals of qualifying shares in a personal company made on or after 6 April 2026, section 8 of the Finance Act 2025 increases the BADR CGT rate to 18%.
• Investors’ Relief (IR): Similarly, for qualifying disposals of unlisted trading company shares made on or after 6 April 2026, section 9 of the Finance Act 2025 increases the Investors’ Relief rate to 18%.

Crucially, the Finance Act 2025 also reduced the lifetime limit for Investors’ Relief. For disposals on or after 30 October 2024, the maximum amount of gains an individual can claim under Investors’ Relief is capped at £1 million (reduced from the previous £10 million limit).  The lifetime limit for BADR remains at £1 million.

Share Matching Rules (Section 106A)

You cannot simply match the shares you sell with the shares you bought cheapest. TCGA 1992 imposes strict “share identification” rules to calculate the base cost of the shares disposed of. Under section 106A of TCGA 1992, you must match the shares sold in the following strict statutory order:

1. Same Day Rule: Shares acquired on the exact same day as the disposal.
2. 30-Day Bed and Breakfasting Rule: Shares acquired within 30 days after the date of the disposal.
3. Section 104 Pool: All other shares of the same class in the same company acquired before the disposal, which pool together into a single average cost base (the Section 104 holding).

Tax-Free Wrappers: ISAs and Pensions

It is important to remember that not all share disposals trigger a CGT liability. Shares held within a Self-Invested Personal Pension (SIPP) or an Individual Savings Account (ISA) grow entirely free of capital gains tax.  When you buy and sell shares within these tax-advantaged wrappers, you do not need to apply the CGT rates, use your £3,000 annual allowance, or report the disposals to HMRC.

Reporting and Payment Deadlines

Unlike the disposal of UK residential property (which triggers a strict 60-day reporting window), you report capital gains on shares through the standard Self Assessment tax return process.

If you dispose of shares during the 2026/27 tax year and generate a chargeable gain exceeding the £3,000 annual exempt amount, you must declare the gain on your Self Assessment return and pay the resulting tax by 31 January 2028.

Next steps for research: Verify if the client has any brought-forward capital losses from previous tax years that can be applied after the current year losses but before the £3,000 annual exempt amount. Consider reviewing the specific qualifying criteria for Business Asset Disposal Relief if the client holds at least 5% of the voting rights in the trading company being sold.