Capital Gains Tax on ETFs and Shares in the UK 2026/27

Unlike some other European countries, the UK doesn't tax investment gains through a flat withholding rate deducted automatically by your broker — you're generally responsible for working out and reporting any Capital Gains Tax (CGT) yourself, and the rate depends on your income tax band.

The annual exempt amount

For the 2026/27 tax year, every individual has a Capital Gains Tax annual exempt amount of £3,000. Gains realised in a tax year up to this amount are entirely tax-free. This allowance cannot be carried forward — if you don't use it, you lose it for that year.

Current CGT rates on shares and ETFs

Since the rules changed on 30 October 2024, gains on shares and funds outside an ISA or pension are taxed at the same rates as most other assets: 18% for basic-rate taxpayers and 24% for higher- and additional-rate taxpayers. Your gain is added on top of your other income to determine which band it falls into, so a large gain can be split across both rates.

The Stocks and Shares ISA: the main shelter

Investments held within a Stocks and Shares ISA are completely exempt from Capital Gains Tax, with no reporting requirement. The annual ISA allowance for 2026/27 is £20,000 (shared across all types of ISA you hold). Given how far the CGT annual exempt amount has fallen from £12,300 in 2022/23 to just £3,000 now, using your ISA allowance has become significantly more valuable for most investors.

Reporting requirements

You must report gains to HMRC via Self Assessment if your total gains for the year exceed the £3,000 exempt amount, or if your total proceeds from disposals exceed £50,000, even if the gain itself is below the exempt amount.

A worked example

A higher-rate taxpayer sells ETF units for a £15,000 gain outside an ISA. The first £3,000 is covered by the annual exempt amount. The remaining £12,000 is taxed at 24%, giving a CGT bill of £2,880. The same gain realised within a Stocks and Shares ISA would be entirely tax-free.