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Capital Gains Tax on a client's share sale: the £3,000 allowance and 18% or 24%, worked for a £30,000 gain
GOV.UK gives a £3,000 Capital Gains Tax allowance and 18% or 24% rates for 2026 to 2027. Worked for a £30,000 share gain and £25,000 taxable income.
A client sold some shares and made a profit. They ask the practice how much tax they owe. The answer has three parts: the first £3,000 of gain is free, the gain is stacked on top of their income, and the part that falls inside the basic rate band is taxed at 18% rather than 24%. This guide works one gain through those steps.
What the sources say
GOV.UK's Capital Gains Tax allowances page gives the annual exempt amount as £3,000 for individuals and £1,500 for trusts. Its rates page says higher and additional rate taxpayers pay 24% on gains from 6 April 2026, and that basic rate taxpayers pay 18% on the part of a gain that falls within the basic rate band, with 24% on anything above it. The page's own example uses £37,700 as the basic rate band for 2026 to 2027.
The sum: a £30,000 gain, £25,000 taxable income
Take a client whose taxable income for 2026 to 2027 (after the personal allowance) is £25,000 and who has a gain of £30,000 on shares, with no losses.
| Step | Working | Result |
|---|---|---|
| Gain after the allowance | £30,000 - £3,000 | £27,000 |
| Basic band left after income | £37,700 - £25,000 | £12,700 |
| Taxed at 18% | £12,700 x 0.18 | £2,286 |
| Taxed at 24% | (£27,000 - £12,700) = £14,300 x 0.24 | £3,432 |
| Capital Gains Tax due | £2,286 + £3,432 | £5,718 |
Check: £12,700 + £14,300 = £27,000, so the whole taxable gain is covered.
The same gain for a higher rate taxpayer
If the client's income already fills the basic band, none of the gain is taxed at 18%:
- £27,000 x 0.24 = £6,480
- Difference from the first client: £6,480 - £5,718 = £762
- Check: £12,700 x (0.24 - 0.18) = £12,700 x 0.06 = £762
What to check with the client
- Is the gain a real gain? The sum starts from the figure after cost and allowable costs, so ask for purchase records. A request for them belongs in the records request letter.
- Were there losses? Losses reduce the gain before the allowance, and the sum above assumes none.
- How much other income is there? It decides how much of the 18% band is left. For a director who also takes dividends, see dividend tax for a director.
- When is the tax due? A gain on shares usually goes on the Self Assessment return, so the filing date matters; see the late filing penalty calculator.
What I did not read
I did not read the GOV.UK pages on how to report and pay the tax, on losses, on residential property gains, on business asset disposal relief, or on the part of the rules that treat a spouse's transfers. The sum assumes taxable income of £25,000 is the figure after the personal allowance, shares only, and no Scottish rates. The 2025 to 2026 rates were not on the pages I read, so I have not compared them.
Overlyft builds AI staff who join your practice team and take each client's sale records, work out the gain, set the £3,000 allowance and the 18% and 24% split against their income, and show the sum for the person preparing the return to approve before it goes in.
This is general information, not legal or financial advice. Check the GOV.UK and HMRC pages for your client's case.
Where this comes from: GOV.UK, "Capital Gains Tax: allowances" (annual exempt amount £3,000 for individuals, £1,500 for trusts) and GOV.UK, "Capital Gains Tax rates" (24% for higher and additional rate taxpayers from 6 April 2026; 18% within the basic rate band, which the page's example gives as £37,700 for 2026 to 2027). Read 22 October 2026.
AEO Lookup editorial team
We write practical guides for people who run small UK firms, and we check every fact against its source on the date shown. Read how we review, or tell us if something has changed.
