Glossary
UK Capital Gains Tax glossary
Plain-English definitions of the terms behind UK CGT. Part of the knowledge base.
- Capital Gains Tax (CGT)
- Tax on the gain you make when you dispose of an asset for more than it cost. In the UK it applies to shares, funds, ETFs and cryptoassets held outside a tax shelter such as an ISA or pension.
- Disposal
- Any event that realises a gain or loss: selling for money, giving an asset away, or swapping one asset for another (including a crypto token-to-token swap). Each disposal is a taxable event.
- Section 104 pool (or holding)
- HMRC treats all your units of the same asset as one pool with a single combined allowable cost. When you sell, cost leaves the pool in proportion to the quantity sold. Each share class and each crypto token has its own pool.
- Allowable cost
- What you can deduct from proceeds: the purchase price plus buying costs (dealing fees, stamp duty). Selling fees reduce your proceeds. Together they determine the gain.
- Proceeds
- The amount you receive on a disposal, after any disposal costs. For a swap or gift it is the market value of what was given up, in GBP.
- Same-day rule
- The first matching rule: a disposal is matched against any acquisitions of the same asset made on the same day, before the other rules are applied.
- Bed and breakfast (30-day) rule
- If you buy the same asset back within 30 days of selling it, the sale is matched to that repurchase instead of your pool. It stops a naive sell-and-rebuy from banking a loss while keeping the position.
- Annual exempt amount (AEA)
- The tax-free CGT allowance each tax year. It is £3,000 for 2026/27. Only net gains above it are taxed; unused allowance cannot be carried forward.
- Carry-forward loss
- A capital loss you did not use in the year it arose. Reported to HMRC, it can be carried forward to reduce gains in future years.
- Bed and ISA
- Selling an asset in a taxable account and rebuying it inside an ISA. The sale is still a CGT disposal at market value, but future growth is then sheltered.
- ISA allowance
- The amount you can pay into ISAs each tax year (£20,000). Gains inside an ISA are free of CGT and are not reported.
- General Investment Account (GIA)
- A taxable investment account with no tax shelter. Disposals in a GIA are the ones that count towards Capital Gains Tax.
- SA108
- The Capital Gains Summary pages of the UK Self Assessment tax return, where you report disposals, gains, losses and the allowance used.
- Self Assessment
- The system by which UK taxpayers report income and gains to HMRC and calculate the tax due, rather than it being deducted at source.
- Stamp duty (SDRT)
- A tax on buying UK shares (0.5% on most electronic purchases). It is part of your allowable cost, so it reduces a future gain.
- HMRC monthly exchange rates
- Official monthly rates HMRC publishes for converting foreign-currency amounts to GBP. Pooled uses them to value USD trades and other non-GBP activity.
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