Capital Gains Tax / Lesson 4 of 7
Share pooling and identification
You sold the shares you bought last week at a loss. HMRC says you sold different ones.
The short answer
- ✓ Disposals are matched same day first, then the next 30 days, then the pool
- ✓ The section 104 pool holds an average cost per share
- ✓ Rebuying within 30 days neutralises a loss you tried to crystallise
- ✓ Reinvested income in accumulation funds increases your pool cost
Why identification rules exist
If you own 1,000 shares in a company bought over several years at different prices, and sell 300, which 300 did you sell? You do not get to choose. Fixed rules decide, in a set order.
1. Shares acquired on the SAME DAY as the disposal
2. Shares acquired in the NEXT 30 DAYS
3. The SECTION 104 POOL, everything else, at average costThe section 104 pool
Most holdings sit here. The pool tracks the total number of shares and the total cost, giving an average cost per share that changes with every purchase.
Buy 500 at £4.00 cost £2,000
Buy 300 at £6.00 cost £1,800
------------
Pool 800 shares cost £3,800
Average cost per share £4.75
Sell 300 shares at £7.00 proceeds £2,100
Cost 300 x £4.75 £1,425
--------
Gain £675
Pool remaining: 500 shares, cost £2,375The 30 day rule
Shares bought within 30 days after a disposal are matched against that disposal before the pool. This exists to stop "bed and breakfasting": selling to realise a loss, then immediately buying back to keep the holding.
The consequence catches ordinary investors who never intended anything clever. Sell at a loss on Monday, rebalance into the same fund three weeks later, and your loss is matched against the repurchase instead of being available to use.
What still works
| Approach | Effective? |
|---|---|
| Sell and rebuy after more than 30 days | Yes, but you are out of the market meanwhile |
| Sell, and your spouse buys the same shares | Generally yes, they are a separate person |
| Sell outside an ISA and rebuy inside one | Yes, commonly called bed and ISA |
| Sell and rebuy a similar but different fund | Yes, it is a different asset |
| Sell and rebuy the same shares next week | No, the 30 day rule catches it |
The bit HMRC does not spell out
Accumulation funds quietly increase your pool cost. Income reinvested inside an accumulation unit has already been taxed as income, and it counts as a further acquisition that raises your pool cost.
Investors who ignore this compute their gain using only the original purchase and overstate it, sometimes by a great deal over many years of reinvestment. Keeping the annual statements matters for exactly this reason.
Common mistakes
- Choosing which shares you sold. The matching rules decide.
- Rebuying within 30 days after crystallising a loss. The loss is neutralised.
- Ignoring accumulation reinvestments. They raise your pool cost.
- Using only the first purchase price. The pool is an average.
Try it on your own numbers
This is the same calculator as the full tool page, using 2026/27 rates.
Your transactions
Add every buy and sell of the same share or coin. We apply the same-day, 30-day and pool rules for you.
| Date | Type | Quantity | Price each (£) | Fees (£) | |
|---|---|---|---|---|---|
Tip: enter one asset at a time. Pooling is per-asset, so don't mix different shares or coins in the same table.
Total capital gain
- Net gain
- Annual exempt amount
- Taxable gain
- CGT due
Remaining Section 104 pool: units at cost .
How each sale was matched
| Sale date | Matched via | Quantity | Gain / loss |
|---|---|---|---|
Estimate only. Assumes all transactions are the same asset and standard rules apply (no gifts, bonus/rights issues, or non-UK complications). For large or unusual portfolios, get professional advice.
Key takeaways
- ✓ Disposals are matched same day first, then the next 30 days, then the pool
- ✓ The section 104 pool holds an average cost per share
- ✓ Rebuying within 30 days neutralises a loss you tried to crystallise
- ✓ Reinvested income in accumulation funds increases your pool cost
Check you have got it
3 quick questions. No score is kept, and you can change your mind.
1. In what order are share disposals matched?
2. You sell at a loss and buy the same shares back two weeks later. What happens to the loss?
3. What effect does reinvested income in an accumulation fund have?
Sources
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