UK trading taxes depend on what you hold, the contract you use and whether the investment sits inside a tax wrapper. Buying shares, trading a currency CFD and placing a financial spread bet can produce similar market exposure but different tax results.
This guide covers UK resident individuals investing or trading their own money. The rates apply to the 2026/27 tax year, from 6 April 2026 to 5 April 2027. Company accounts, business hedging and cross-border tax circumstances need separate treatment. For the wider account and regulatory considerations, see our guide to trading in the UK.
Which Taxes Apply to Each Product?
The table gives the usual starting point for private individuals. It is not an election: you cannot choose whichever treatment produces the smallest bill.
| Product or account | Usual treatment of profits | Main consideration |
|---|---|---|
| Shares outside an ISA | Capital Gains Tax on disposals; dividend tax on income | Purchase taxes and share matching rules can affect the calculation |
| Retail CFDs, including currency CFDs | Normally Capital Gains Tax unless taxable as trading income | Include contract charges and adjustments, not just the price movement |
| Financial spread bets | Normally outside Income Tax and Capital Gains Tax for private betting | Losses normally receive no tax relief |
| Qualifying shares inside an ISA | No UK Capital Gains Tax or dividend tax | The account must meet ISA conditions |
Separate realised gains, dividends, interest and deposits in your records. A platform’s account balance mixes several things that do not belong in the same tax calculation.
Capital Gains Tax Rates for 2026/27
The annual Capital Gains Tax exemption for most individuals is £3,000. Ordinary investment gains above the available exemption are taxed at 18% or 24%. The House of Commons briefing on 2026/27 tax rates sets out these amounts.
The exemption belongs to the person, not the account. Opening three brokerage accounts does not create three allowances. Your Income Tax Personal Allowance is separate and cannot simply be added to the CGT exemption.
The 18% rate applies to taxable gains that fit within your unused basic rate band. Gains above that space attract 24%. Being a basic rate taxpayer before the disposal does not guarantee that every pound of gain receives the lower rate.
A Worked CGT Example
Assume you have £30,000 of taxable income after your Personal Allowance and other relevant reliefs. During 2026/27, you realise £18,000 of investment gains and £3,000 of allowable losses. Assume no other gains, losses or adjustments.
Your net gain is £15,000. Deducting the £3,000 annual exemption leaves £12,000 taxable. With a basic rate band of £37,700, you have £7,700 of space remaining:
- £7,700 at 18% produces £1,386 of tax.
- The remaining £4,300 at 24% produces £1,032.
- Total CGT is £2,418.
This example also shows why a flat percentage of every profitable trade is a rough budgeting method, not a finished tax calculation.
How Share Trading Is Taxed
For ordinary private investment holdings outside a tax wrapper, selling shares can create a capital gain or loss. Withdrawing the proceeds is not the trigger. Leaving the money with the broker, or immediately buying another investment, does not undo the disposal.
Start with sale proceeds, subtract the relevant acquisition cost and account for allowable transaction expenses. Dealing commissions and applicable share purchase taxes can affect the calculation. Keep these separate from general spending on subscriptions, equipment or trading courses; do not assume every trading-related expense is deductible.
Share Matching Comes Before Choosing a Cost
When you buy the same class of shares repeatedly, you cannot simply pick whichever purchase produces the most convenient gain. The usual order is purchases on the same day, purchases in the following 30 days, then the pooled holding. These requirements sit within the statutory share pooling and identification rules.
The pool tracks the combined allowable cost of the remaining shares. Same day and subsequent 30 day purchases can take priority over that average cost.
This matters when selling near the end of the tax year and buying back shortly afterwards. A transaction intended to realise an old gain may instead match against the new purchase. Check the calculation before treating a sale as completed tax planning.
Stamp Duty and SDRT
Purchases of many UK company shares attract Stamp Duty or Stamp Duty Reserve Tax at 0.5%, subject to exemptions. The distinction depends partly on how the transfer takes place. The Treasury’s parliamentary explanation of share stamp taxes describes the standard charge.
At 0.5%, a chargeable £10,000 purchase costs £50 in purchase tax before other fees. That cost exists whether the subsequent trade wins or loses. Frequent share purchases can therefore create a meaningful expense even before CGT enters the discussion.
Dividend Tax Is Separate From CGT
For 2026/27, the dividend allowance is £500. Above available allowances, dividend tax rates are 10.75% for the basic rate band, 35.75% for the higher rate band and 39.35% for the additional rate band. These are the current HMRC dividend rates and allowance.
Assuming your Personal Allowance is already used and all dividends remain within the basic rate band, £2,000 of dividends leaves £1,500 taxable after the dividend allowance. At 10.75%, the bill is £161.25.
Reinvesting a dividend does not turn it into a capital gain or remove the income tax question. Record the dividend and the resulting share purchase separately. Dividends also count when determining which income bands apply, including amounts covered by the dividend allowance.
How CFDs Are Taxed
Retail CFD profits normally fall within Capital Gains Tax unless the activity produces taxable trading income. The calculation includes commissions and amounts equivalent to interest and dividends when the contract closes. That treatment is set out in HMRC’s guidance on retail contracts for differences.
A share CFD does not give you ownership of the underlying shares. Its “dividend adjustment” is therefore not an ordinary company dividend for your tax return. Contract financing adjustments also need to be distinguished from genuine interest paid on cash in your account.
Suppose a closed CFD produces a £2,400 price gain, £300 of financing debits and £40 of commission, with no other adjustments. The resulting contract gain is £2,060. Before applying that calculation, check whether the broker’s displayed profit already includes those charges. Deducting them twice is an easy spreadsheet mistake.
Export both the trade history and cash ledger. A report showing entry price, exit price and headline profit may omit adjustments needed to reconcile the result.
Forex Tax Depends on the Contract
“Forex” identifies the market, not a single tax category. A currency CFD generally follows the CFD treatment above. A genuine financial spread bet on the same currency pair normally follows the betting treatment below. Neither becomes tax exempt simply because the underlying asset is a currency.
Check the product description and contractual terms rather than relying on an account labelled “forex” or “spot”. If the legal form is unclear, ask the provider for the contract documentation before preparing a return.
A personal foreign currency bank account is different again. For an individual holding their own bank deposit, exchange gains generally do not create chargeable gains, and exchange losses are not allowable capital losses. The foreign currency bank account provisions introduced in 2012 changed that treatment.
Do not extend that result to every currency-related investment. A bank deposit, physical currency and a derivative contract are different assets. Also distinguish exchange movements from interest earned on the deposit; exemption of one does not establish exemption of the other.
Is Spread Betting Tax Free?
For an individual placing genuine private financial spread bets, winnings are normally outside Income Tax and Capital Gains Tax. The Income Tax position depends on the contract being a gambling or wagering arrangement. Commercial use, such as a business hedge, can change the result under HMRC’s spread betting and commercial hedging guidance.
The other side of this treatment matters: private spread betting losses normally cannot offset taxable share or CFD gains. An £8,000 spread betting loss does not ordinarily cancel an £8,000 chargeable share gain.
Keep betting results separate from taxable investment results, even if both appear on the same provider’s platform. Combining them into one annual “trading profit” can produce the wrong figure.
Tax treatment should not dictate the product choice by itself. Compare costs, position size, financing and the money at risk. A tax exempt loss is still a loss; HMRC does not refund it because the account had an attractive label.
Using Capital Losses Correctly
Allowable capital losses are deducted from gains in the same tax year. Unused losses brought forward can then reduce remaining gains to the annual exemption, with any balance carried forward. Claims generally have a four year deadline from the end of the disposal tax year. These rules appear in HMRC’s capital gains, loss relief and reporting guidance.
For example, £9,000 of gains and £2,000 of current year losses leave £7,000. After the £3,000 exemption, £4,000 remains taxable. If you also have £6,000 of valid brought-forward losses, using £4,000 would leave £2,000 available for later years.
Maintain a separate loss schedule rather than relying on memory or last year’s account balance. Record when each loss arose, when it was claimed and how much has been used.
Tax Wrappers and “Professional Trader” Labels
Qualifying share gains and dividends inside a stocks and shares ISA are exempt from UK CGT and dividend tax. Choosing a suitable wrapper can therefore reduce both tax and administration. Compare eligibility, contribution rules and access needs in our guide to UK trading accounts and tax wrappers.
Do not assume a wrapper removes gains already made outside it. Selling taxable investments to fund an ISA can itself create a disposal. Plan the sale and the new subscription as separate steps.
Likewise, a broker’s account classification is not a tax ruling. Retail and professional client status concerns the regulatory relationship with the provider. It does not, by itself, establish that your profits are business income.
If you believe your activity amounts to a taxable financial trading business, obtain advice on that question before applying business deductions or loss relief. The distinction needs more than a busy trading history.
Records, Reporting and Payment Dates
Keep purchase and sale confirmations, contract charges, dividend records, currency conversion records and loss schedules. Retain acquisition history while investments remain unsold; an annual statement may not contain the original cost needed years later.
Reporting and paying are separate questions. If you are registered for Self Assessment, chargeable asset disposal proceeds above £50,000 can require reporting even when gains fall below the annual exemption. That threshold concerns sale proceeds, not profit.
For someone newly required to file for 2026/27, the usual notification deadline is 5 October 2027. The normal online return and balancing payment deadline is 31 January 2028, applying the timetable in HMRC’s Self Assessment filing and payment guidance.
Do not confuse those dates with the previous tax year. The normal online filing and payment deadline for 2025/26 is 31 January 2027. Other reporting routes can have different deadlines, so confirm which route applies before relying on a calendar reminder.
Reconcile records throughout the year and keep an estimated tax reserve outside the trading balance. Where residence, business status or contract classification is uncertain, resolve it before filing. A tidy calculation cannot repair the wrong tax treatment.