If you sell shares that are not held in an ISA or SIPP and your gain is larger than the annual CGT exempt amount, you must tell HMRC. ISAs and SIPPs keep those gains out of the tax net.
When a sale needs reporting
Only sales that produce a gain above the CGT exempt amount trigger a reporting duty. For 2024/25 the exemption is £3,000. Gains below that threshold can be ignored if you are not in Self Assessment.
What counts as a gain
A gain is the sale price minus the purchase price, adjusted for any costs such as broker fees, stamp duty, or financial advice directly tied to the transaction. Reinvested dividends raise the cost base and reduce the taxable gain.
ISA and SIPP protection
Shares held inside a stocks and shares ISA or a SIPP are fully protected. Any gain, no matter how large, is tax‑free and does not need to be reported. Only the shares outside those wrappers are subject to CGT rules.
Tracking purchases: same‑day and 30‑day rules
HMRC matches buys and sells by the same‑day rule first, then any purchase within 30 days before or after a sale. This prevents traders from resetting the cost base by buying and selling within a short window.
Section 104 pooling for casual investors
Most investors use Section 104 pooling, which averages the cost of all identical shares purchased at different times. This simplifies calculation: Average cost = total cost / total shares. The gain is then sale proceeds minus the pooled cost of the shares sold.
Reporting through Self Assessment
If you are already registered for Self Assessment, use the SA108 Capital Gains Summary form. Enter each disposal or the pooled figures. Keep trade confirmations, broker statements and reinvestment records for five years after the 31 January deadline.
Deadlines and penalties
File the SA108 by 31 January following the tax year end (5 April). If you are not in Self Assessment but owe CGT, register by 5 October after the tax year. Missing the deadline can trigger a fixed £100 fine and daily charges thereafter.
Common mistakes to avoid
- Assuming no tax because the gain is small – the threshold still applies.
- Ignoring overseas brokers – UK residents pay CGT on global assets.
- Mixing ISA and non‑ISA shares – track them separately.
- Relying on broker reports alone – keep your own records.
Bottom line
You only need to tell HMRC if you sell shares outside an ISA or SIPP and your gain exceeds the CGT exempt amount. Use ISA or SIPP to shield gains, keep accurate records, and file on time to avoid penalties.