Capital Gains Tax on Shares in 2025-26: Rates, Allowance & Examples
Capital Gains Tax (CGT) applies to the profit you make when you sell shares held outside an ISA or pension. The rules changed significantly in the October 2024 Budget, with rates on shares rising and the annual exempt amount having already been cut sharply from its 2022-23 high of £12,300. Here is the current picture for 2025-26.
CGT rates on shares 2025-26
| Taxpayer band | CGT rate on shares |
|---|---|
| Basic Rate (total income up to £50,270) | 18% |
| Higher Rate (total income above £50,270) | 24% |
| Additional Rate (total income above £125,140) | 24% |
Your CGT rate depends on your total taxable income including the capital gain. If a gain straddles the Basic/Higher Rate boundary, the portion within the basic rate band is taxed at 18% and the excess at 24%.
Annual exempt amount
Every individual receives an annual exempt amount for CGT: £3,000 in 2025-26. You only pay CGT on gains above this threshold. Married couples and civil partners each have their own £3,000 allowance.
This is a dramatic reduction from recent years:
- 2022-23: £12,300
- 2023-24: £6,000
- 2024-25: £3,000
- 2025-26: £3,000
Example: selling shares with a £10,000 gain
Basic Rate taxpayer, no other capital gains this year:
- Total gain: £10,000
- Annual exempt amount: £3,000
- Taxable gain: £7,000
- CGT at 18%: £1,260
Higher Rate taxpayer, same gain:
- Taxable gain: £7,000
- CGT at 24%: £1,680
ISA: the permanent CGT shelter
Gains on shares held inside an ISA are completely free of CGT — forever, regardless of the size of the gain. The ISA allowance in 2025-26 is £20,000. If you hold shares outside an ISA, consider whether they could be sheltered inside one.
Bed and ISA strategy
Bed and ISA allows you to sell shares held outside an ISA and repurchase the same shares inside an ISA. This crystallises any gain (taxable if above the annual exempt amount, but sets a new higher base cost) and moves the holding into the ISA wrapper for future CGT-free growth.
Timing matters: you sell outside the ISA, the proceeds land in cash, and you repurchase inside the ISA in a separate transaction. Unlike the 'bed and breakfast' rule (which prevents selling and immediately rebuying outside an ISA to create an artificial loss), there is no matching rule for ISA transactions.
The 30-day same-day rule
You cannot sell shares and repurchase the same shares outside an ISA within 30 days to crystallise a loss for tax purposes — HMRC's 'bed and breakfast' rules disallow this. The loss would be matched against the repurchased shares instead. The 30-day rule does not apply when the repurchase is inside an ISA.
Frequently asked questions
Do I need to report capital gains to HMRC?
If your gains exceed the annual exempt amount, or if your total proceeds from selling assets exceed four times the exempt amount (£12,000 in 2025-26), you must report them — either through Self Assessment or the online CGT service (for non-Self Assessment taxpayers). The deadline is 31 January following the end of the tax year.
Can I offset capital losses against gains?
Yes. Capital losses from the same year are deducted from gains before the annual exempt amount is applied. Unused losses can be carried forward indefinitely against future gains.