Last updated: 14 October 2026
What reliefs can reduce the gain when you sell shares?
Several. The main ones are Business Asset Disposal Relief, which taxes up to £1 million of lifetime gains at 18% in 2026/27, Investors’ Relief, the £3,000 annual exempt amount, losses, and EIS or SEIS reliefs. You may also defer gains using EIS deferral relief, or hold shares in an ISA so gains are tax-free. Which applies depends on the shares and how long you’ve held them.
Main reliefs
| Relief | Who qualifies | Effect |
| Annual exempt amount | Everyone | First £3,000 of gains tax-free |
| Business Asset Disposal Relief | Officer or employee with 5%+ in a trading company, held 2 years | 18% on up to £1m lifetime |
| Investors’ Relief | External investors in unlisted trading companies, new shares held 3 years | 18% on up to £1m lifetime |
| EIS | Shares held 3 years with EIS relief | Gains exempt |
| SEIS | Shares held 3 years with SEIS relief | Gains exempt |
| EIS deferral | Reinvest in EIS shares | Defers the gain |
| Capital losses | Losses on other assets | Set against gains |
| Gift holdover relief | Gifts of trading company shares | Defers the gain to the new owner |
CGT rates in 2026/27
Gains on shares are taxed at 18% within the basic rate band and 24% above it. BADR and Investors’ Relief rose from 14% in 2025/26 to 18% from 6 April 2026.
Example
Lucy owns 30% of a trading company she works in, and has done for 8 years. She sells her shares for a £600,000 gain. With BADR, she pays 18% on £597,000 (after the £3,000 annual exemption), which is £107,460. Without BADR, if she’s a higher-rate taxpayer, she’d pay 24%, or £143,280.
Losses
If shares become worthless, you can make a negligible value claim to create a loss. Losses on shares in unlisted trading companies can sometimes be set against income through share loss relief.
Spouses
Transfers between spouses are CGT-free. Moving shares to a spouse before a sale can use their annual exemption and lower rate band, and both can qualify for BADR if they meet the conditions.
Timing
- Selling across two tax years uses two annual exemptions
- A sale in a year with low income may use the 18% rate
- CGT on shares is paid by 31 January after the tax year
Records to keep
Keep the purchase contract, the completion statement or broker’s contract note, and evidence of your original cost. For BADR, keep records showing your shareholding, voting rights and role in the company for the 2 years before the sale. Without these, HMRC may refuse the relief.
Reporting
Report the gain on your Self Assessment return, or use the real-time CGT service to pay earlier. Claims for BADR must be made by the first anniversary of 31 January after the tax year of the sale.
Frequently asked questions
Can I get BADR on listed shares?
Only if you hold 5% and work for the company.
Do ISA shares need reporting?
No, gains in an ISA are tax-free.
What if I’m paid in instalments?
CGT may be due on the full amount at once, with options to pay by instalments.
Do I get relief for selling costs?
Yes, broker’s fees and legal costs reduce the gain.
Related: BADR on a property sale, Business Asset Disposal Relief update and offsetting share losses.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with capital gains tax on shares. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
