Trading Tax UK Guide 2026

Capital Gains Tax (CGT)

When you sell shares, ETFs, or funds at a profit, you owe CGT on the gain. The annual exemption for 2025/26 is £3,000. Only gains above this are taxed.

Losses can be offset against gains. If you sell Share A at a £5,000 profit and Share B at a £2,000 loss, your net gain is £3,000. You can also carry forward unused losses to future years.

Tax-Free Options

• •Stocks & Shares ISA — zero tax on gains, dividends, and interest. £20,000 annual allowance.
• •Spread betting — profits are currently tax-free in the UK (classified as gambling, not investing). But losses are not tax-deductible either.
• •SIPP/Pension — tax relief on contributions (20–45%), no CGT or dividend tax inside the wrapper. Taxed as income when withdrawn in retirement.

Stamp Duty

When you buy UK shares, you pay 0.5% stamp duty (Stamp Duty Reserve Tax). Buy £10,000 of Vodafone shares and you pay £50 in stamp duty. This does not apply to ETFs, CFDs, spread bets, AIM shares, or non-UK shares.

When to File Self-Assessment

You must file a self-assessment tax return if your total capital gains exceed £50,000 in sales proceeds OR your gains exceed the £3,000 annual exemption. You must report by 31 January following the end of the tax year.

If all your investments are inside an ISA, you do not need to report anything to HMRC. Another reason to maximise your ISA allowance.