{"id":323,"date":"2026-09-14T09:00:00","date_gmt":"2026-09-14T09:00:00","guid":{"rendered":"https:\/\/taxbull.co.uk\/blog\/?p=323"},"modified":"2026-09-14T09:00:00","modified_gmt":"2026-09-14T09:00:00","slug":"section-104-pool-deep-dive-examples","status":"publish","type":"post","link":"https:\/\/taxbull.co.uk\/blog\/section-104-pool-deep-dive-examples\/","title":{"rendered":"Section 104 Pool Deep Dive \u2014 Worked Examples With Real Numbers"},"content":{"rendered":"

The Section 104 pool is the workhorse of UK share CGT. Most disposals by ordinary investors end up matched against the pool \u2014 same-day and 30-day matching are edge cases. Yet many people have a shaky understanding of how the pool actually works. Let’s fix that with proper numbers.<\/p>\n

What the pool is<\/h2>\n

Under TCGA 1992 s.104<\/a>, all shares of the same class in the same company are grouped into a single pool. The pool tracks two running totals: total shares<\/strong> and total cost<\/strong>. The average cost per share is total cost \u00f7 total shares.<\/p>\n

Every purchase increases both totals. Every sale decreases both totals proportionally. HMRC Helpsheet HS284<\/a> describes this as “each share in the holding is treated as if acquired at the same average cost.”<\/p>\n

Example 1: Building and selling from a pool<\/h2>\n\n\n\n\n\n\n\n\n
Date<\/th>\nAction<\/th>\nShares<\/th>\nPrice<\/th>\nPool Qty<\/th>\nPool Cost<\/th>\nAvg Cost<\/th>\n<\/tr>\n<\/thead>\n
15 Mar 2023<\/td>\nBuy<\/td>\n200<\/td>\n\u00a35.00<\/td>\n200<\/td>\n\u00a31,000<\/td>\n\u00a35.00<\/td>\n<\/tr>\n
10 Aug 2023<\/td>\nBuy<\/td>\n150<\/td>\n\u00a36.20<\/td>\n350<\/td>\n\u00a31,930<\/td>\n\u00a35.514<\/td>\n<\/tr>\n
22 Jan 2024<\/td>\nBuy<\/td>\n100<\/td>\n\u00a34.50<\/td>\n450<\/td>\n\u00a32,380<\/td>\n\u00a35.289<\/td>\n<\/tr>\n
5 Nov 2024<\/td>\nSell 200<\/td>\n\u2212200<\/td>\n\u00a37.80<\/td>\n250<\/td>\n\u00a31,322.22<\/td>\n\u00a35.289<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

The November sale: cost allocated = 200 \u00d7 \u00a35.289 = \u00a31,057.78. Proceeds = 200 \u00d7 \u00a37.80 = \u00a31,560. Gain: \u00a3502.22<\/strong>.<\/p>\n

After the sale, 250 shares remain with a cost of \u00a31,322.22 (= \u00a32,380 \u2212 \u00a31,057.78). The average cost per share hasn’t changed \u2014 it’s still \u00a35.289. Selling from the pool never changes the average; only buying more shares at a different price changes it.<\/p>\n

Example 2: Multiple sells eroding the pool<\/h2>\n

Continuing from above \u2014 Emma sells in tranches:<\/p>\n\n\n\n\n\n\n\n
Date<\/th>\nSell<\/th>\nPrice<\/th>\nCost (from pool)<\/th>\nGain\/Loss<\/th>\nPool remaining<\/th>\n<\/tr>\n<\/thead>\n
15 Feb 2025<\/td>\n100<\/td>\n\u00a38.50<\/td>\n\u00a3528.89<\/td>\n\u00a3321.11<\/td>\n150 shares, \u00a3793.33<\/td>\n<\/tr>\n
20 May 2025<\/td>\n80<\/td>\n\u00a33.20<\/td>\n\u00a3423.11<\/td>\n\u2212\u00a3167.11 (loss)<\/td>\n70 shares, \u00a3370.22<\/td>\n<\/tr>\n
10 Sep 2025<\/td>\n70<\/td>\n\u00a36.00<\/td>\n\u00a3370.22<\/td>\n\u00a349.78<\/td>\n0 shares, \u00a30<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

Each sell allocates cost proportionally: shares sold \u00f7 pool quantity \u00d7 pool cost. The loss in May is an allowable capital loss<\/a> that offsets the February and September gains.<\/p>\n

Example 3: Stock split within the pool<\/h2>\n

Using the original pool of 450 shares at \u00a32,380 total cost. Suppose the company does a 2:1 stock split<\/a>:<\/p>\n

Before split: 450 shares, \u00a32,380 cost, \u00a35.289 average.
\nAfter split: 900 shares, \u00a32,380 cost, \u00a32.644 average.<\/p>\n

Total cost unchanged. Shares doubled. Average halved. No disposal, no CGT event. This is the standard treatment under TCGA 1992 ss.126-131<\/a>.<\/p>\n

Example 4: Pool interaction with the 30-day rule<\/h2>\n

Pool: 500 shares, total cost \u00a34,000, average \u00a38.00. On 1 March, you sell 200 at \u00a312.00. On 20 March (within 30 days), you buy 200 at \u00a311.50.<\/p>\n

The 30-day rule matches first. The 200 sold are matched to the 200 bought at \u00a311.50 \u2014 not<\/strong> the pool. Gain = (200 \u00d7 \u00a312) \u2212 (200 \u00d7 \u00a311.50) = \u00a3100.<\/p>\n

The pool is unaffected<\/strong>. It still has 500 shares at \u00a34,000. The 200 shares bought on 20 March don’t enter the pool \u2014 they’ve been consumed by the 30-day match. See our matching rules guide<\/a> for the full priority order.<\/p>\n

Fees in the pool<\/h2>\n

Broker commissions and stamp duty<\/a> are added to the pool cost at the time of purchase. A purchase of 100 shares at \u00a35.00 with \u00a311.95 commission and \u00a32.50 stamp duty enters the pool as 100 shares with a cost of \u00a3514.45 \u2014 not \u00a3500.<\/p>\n

Track it properly<\/h2>\n

Doing this manually across dozens of trades in multiple companies \u2014 with splits, fees, and 30-day interactions \u2014 is where spreadsheets break down. TaxBull<\/a> tracks the Section 104 pool for every holding automatically, showing the pool state after every transaction. You can verify the numbers against these examples to confirm it’s working correctly.<\/p>\n

This is general information with simplified examples. Real portfolios involve additional complexity. Consult a tax professional if you’re uncertain about your specific calculations.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Detailed worked examples of the Section 104 pool in action. Multiple buys, partial sells, stock splits, and how the pool tracks your average cost over time.<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[181,185,8,34,187,186],"class_list":["post-323","post","type-post","status-publish","format-standard","hentry","category-cgt-guides","tag-average-cost","tag-pool","tag-section-104","tag-share-pooling","tag-tcga-s104","tag-worked-examples"],"_links":{"self":[{"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/posts\/323","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=323"}],"version-history":[{"count":1,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/posts\/323\/revisions"}],"predecessor-version":[{"id":368,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/posts\/323\/revisions\/368"}],"wp:attachment":[{"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=323"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=323"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/taxbull.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=323"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}