Capital Gains Tax has its own vocabulary. This glossary defines every term you’re likely to encounter, with links to our detailed guides where they exist.<\/p>\n
Allowable costs<\/strong> \u2014 Expenses you can deduct from your gain. Includes broker commissions, stamp duty<\/a>, legal fees, and FX conversion costs<\/a>. Defined in TCGA 1992 s.38<\/a>.<\/p>\n Annual Exempt Amount (AEA)<\/strong> \u2014 The tax-free CGT allowance. \u00a33,000 for individuals in 2025\/26 and 2026\/27. Can’t be carried forward. See our rates guide<\/a>.<\/p>\n Accumulating fund<\/strong> \u2014 An ETF or fund that reinvests dividends internally rather than paying them out. May trigger Excess Reportable Income<\/a>. See our ETF guide<\/a>.<\/p>\n Bed and breakfast<\/strong> \u2014 The 30-day rule<\/a>. Selling shares and rebuying within 30 days. Named after the original strategy of selling on Friday and rebuying on Monday, which was blocked in 1998.<\/p>\n Bed and ISA<\/strong> \u2014 Selling shares in a GIA and rebuying inside an ISA<\/a>. Legal and effective \u2014 ISA repurchases don’t trigger the 30-day rule.<\/p>\n Bed and spouse<\/strong> \u2014 Transferring shares to your spouse (at no gain\/no loss) for them to sell. Uses their CGT exemption and potentially lower tax band. See our gifting guide<\/a>.<\/p>\n Chargeable asset<\/strong> \u2014 Any asset subject to CGT when disposed of. Includes shares, property, crypto, options. Defined broadly in TCGA 1992 s.21<\/a>.<\/p>\n Chargeable gain<\/strong> \u2014 The taxable profit from disposing of a chargeable asset.<\/p>\n Contract note<\/strong> \u2014 The formal confirmation from your broker<\/a> for each trade. Your primary evidence for HMRC.<\/p>\n Disposal<\/strong> \u2014 Selling, gifting, swapping, or otherwise getting rid of an asset. Triggers CGT. See our beginner’s guide<\/a>.<\/p>\n Disposal proceeds<\/strong> \u2014 What you received (or are treated as receiving) for the asset.<\/p>\n Dividend allowance<\/strong> \u2014 First \u00a3500 of dividends is tax-free (2025\/26). Separate from CGT. See our dividend tax guide<\/a>.<\/p>\n ERI (Excess Reportable Income)<\/strong> \u2014 Income from offshore accumulating funds<\/a> that you haven’t received as cash but must declare as income. Also added to your S104 pool cost.<\/p>\n FIFO (First In, First Out)<\/strong> \u2014 US cost basis method. Does not apply in the UK<\/a>. HMRC uses pooling.<\/p>\n FSCS<\/strong> \u2014 Financial Services Compensation Scheme<\/a>. Protects up to \u00a385,000 if your broker fails<\/a>.<\/p>\n GIA (General Investment Account)<\/strong> \u2014 A taxable investment account. Gains are subject to CGT. Compare with ISA<\/a>.<\/p>\n HMRC exchange rates<\/strong> \u2014 Official monthly rates for converting foreign currency to GBP<\/a>. Published on the Trade Tariff service<\/a>.<\/p>\n ISA<\/strong> \u2014 Individual Savings Account. Gains inside an ISA are completely exempt from CGT<\/a>. \u00a320,000 annual allowance.<\/p>\n Loss relief<\/strong> \u2014 Using capital losses to offset gains<\/a>. Current-year losses are used in full; brought-forward losses are used only to reduce gains to the AEA.<\/p>\n Matching rules<\/strong> \u2014 HMRC’s mandatory share identification rules<\/a>. Same-day \u2192 30-day \u2192 S104 pool.<\/p>\n MTD (Making Tax Digital)<\/strong> \u2014 HMRC’s digital reporting programme<\/a>. Doesn’t yet apply to CGT directly.<\/p>\n No gain, no loss<\/strong> \u2014 Tax treatment of transfers between spouses. The recipient inherits the original cost basis. See gifting shares<\/a>.<\/p>\n Option (traded)<\/strong> \u2014 A chargeable asset under TCGA s.144<\/a>. Gains\/losses reported in SA108 Boxes 14-22.<\/p>\n Pool<\/strong> \u2014 See Section 104 pool<\/a>.<\/p>\n Reporting fund status<\/strong> \u2014 Determines whether gains on offshore ETFs<\/a> are taxed as capital gains (good) or income (bad).<\/p>\n SA108<\/strong> \u2014 The Capital Gains Summary supplementary page<\/a> of the self-assessment tax return.<\/p>\n Section 104 pool<\/strong> \u2014 The weighted-average cost pool<\/a> for shares. All shares of the same class in the same company are pooled together.<\/p>\n SDRT<\/strong> \u2014 Stamp Duty Reserve Tax<\/a>. 0.5% on purchases of UK shares.<\/p>\n TCGA 1992<\/strong> \u2014 Taxation of Chargeable Gains Act 1992<\/a>. The primary legislation governing UK CGT.<\/p>\n Temporary non-residence<\/strong> \u2014 The 5-year rule<\/a> that catches people who leave, sell assets, and return.<\/p>\n W-8BEN<\/strong> \u2014 IRS form that reduces US dividend withholding<\/a> from 30% to 15% for UK residents.<\/p>\n Wash sale<\/strong> \u2014 US rule. Does not apply in the UK<\/a>.<\/p>\nB<\/h2>\n
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