Advanced Taxation (UK) · Capital gains tax: the basic principles of computing gains and losses

Share Matching Rules: Same Day, 30-Day and Section 104 Pool

Updated 11 October 2026 · Fact-checked

When an individual sells shares of the same class in the same company, you match the disposal against acquisitions in a fixed order: same day, then the next 30 days, then the section 104 pool. Each match gets its own gain or loss. Bonus and rights issues change the pool.

Understand Share Disposals and Matching Rules

Shares of the same class in the same company are identical. So if you bought shares at different times and sell some, you need a rule to say which ones were sold. Capital gains tax uses fixed matching rules, not your choice.

For an individual, you match a disposal in this order:

Same day: acquisitions made on the day of the disposal.
30-day rule: acquisitions in the 30 days after the disposal, taking the earliest first.
Section 104 pool: all other shares held before the disposal, treated as one pool.

The pool keeps two running figures: the number of shares and their total cost. When you sell from the pool, the cost is the pool cost multiplied by shares sold, divided by shares in the pool. The rest stays in the pool. You never need to say which individual share was sold.

The 30-day rule stops people selling and buying back almost at once (bed and breakfasting) to create a gain or loss. The later purchase is matched first, so its actual cost is used, not the pool average.

A bonus issue gives free shares. It adds shares to the pool at no extra cost. A rights issue is an offer to buy new shares from the company, usually at a price below market. The new shares and the cash paid are added to the pool. In both cases there is no disposal, so there is no gain at that point.

Key rules to remember

Matching order (individuals): 1. Same day 2. Next 30 days (earliest first) 3. Section 104 pool; Apply in this order. Only shares of the same class in the same company are matched.
Gain on each matched block: Gain = Proceeds for the shares matched − Allowable cost of those shares; If a disposal is matched in blocks, split the total proceeds by the number of shares in each block.
Cost of shares sold from the pool: Cost = Pool cost × Shares sold ÷ Total shares in pool; Deduct the shares sold and the cost used from the pool. Carry the rest forward.
Bonus issue: New pool shares = old shares × bonus ratio; pool cost unchanged; Add the new shares to the pool at nil cost. No disposal arises.
Rights issue: Pool shares + new shares taken up; pool cost + cash paid; Add the shares and the cost paid to the pool. No disposal arises when the rights are taken up.

How to solve Share Disposals and Matching Rules questions

Use this method for any share disposal question. Do the matching before you compute any gain.

1List every acquisition and disposal of the same class of shares in date order, with number of shares and cost or proceeds.
2Match the disposal against same-day acquisitions first. Compute the gain or loss on that block.
3Match the remaining shares against acquisitions in the 30 days after the disposal, earliest first. Use the actual cost of those shares.
4Build the section 104 pool from all other earlier purchases. Add bonus shares at nil cost and add rights shares and the cash paid, in date order.
5Match the shares still unmatched against the pool. Cost is pool cost × shares sold ÷ pool shares.
6Split the sale proceeds between the blocks by number of shares. Compute the gain or loss on each block and total them.
7Show the pool remaining after the disposal, with shares and cost carried forward.
8Then apply losses, the annual exempt amount and rates as the question requires.

Quickest way: Three-column matching grid

When to use it: Use it when a question has several purchases around the disposal date and time is short.

Draw three boxes: same day, 30 days, pool. Write the disposal date at the top.
Mark each purchase with its date. Same date goes in box one. Dates up to 30 days later go in box two. Everything earlier goes in box three.
Work out proceeds per share. Multiply by the shares in each box.
Boxes one and two use their own cost. Box three uses the pool average cost per share.
Check that the shares in the three boxes equal the shares sold, and that proceeds add up to the total.

Common mistakes in Share Disposals and Matching Rules

Using the pool before checking same-day and 30-day purchases.
Students treat the pool as the default and forget the order of matching.
Fix: Always check dates first. Look for purchases on the sale day and in the following 30 days before touching the pool.
Matching the 30-day rule to purchases made before the sale.
The words suggest a look-back period.
Fix: The 30 days run forward from the disposal. Earlier purchases go into the pool.
Adding bonus shares to the pool at their market value.
Students confuse a bonus issue with a purchase.
Fix: Bonus shares cost nothing. Add the shares to the pool and leave the total cost unchanged.
Treating a rights issue as a disposal, or leaving out the cash paid.
The pool changes, so students assume something was sold.
Fix: Taking up rights is not a disposal. Add both the new shares and the cash paid to the pool.
Putting all proceeds against one block of shares.
Students rush to compute a single gain.
Fix: Apportion the proceeds by the number of shares in each matched block, then compute a gain for each block.
Ignoring incidental costs of buying and selling.
Questions give them as small side notes.
Fix: Add incidental buying costs to the cost. Deduct incidental selling costs from proceeds.

Worked examples

Example 1

Anil bought 3,000 shares in Zeta plc on 1 June 2016 for £6,000 and 2,000 shares on 10 March 2019 for £9,000. On 15 November 2025 he sold 4,000 shares for £28,000. He also bought 500 shares on 15 November 2025 for £3,100 and 700 shares on 29 November 2025 for £5,600. Compute his chargeable gains on the disposal.

Show the solution

Proceeds per share = £28,000 ÷ 4,000 = £7.
Same day: 500 shares. Proceeds £3,500. Cost £3,100. Gain £400.
30-day rule: 700 shares bought on 29 November 2025 (14 days after sale). Proceeds £4,900. Cost £5,600. Loss £(700).
Pool: 3,000 + 2,000 = 5,000 shares, cost £6,000 + £9,000 = £15,000.
Shares left to match = 4,000 − 500 − 700 = 2,800. Proceeds = 2,800 × £7 = £19,600.
Pool cost = £15,000 × 2,800 ÷ 5,000 = £8,400. Gain £11,200.
Total = £400 − £700 + £11,200 = £10,900.
Pool carried forward: 2,200 shares, cost £15,000 − £8,400 = £6,600.

Answer: Net chargeable gain before losses and the annual exempt amount is £10,900. Pool carried forward: 2,200 shares at a cost of £6,600.

Example 2

Bina bought 2,000 shares in Kora plc on 1 April 2015 for £5,000. In August 2018 there was a 1 for 2 bonus issue. On 1 October 2021 she took up a 1 for 3 rights issue at £4 per share. On 1 December 2025 she sold 1,600 shares for £12,000. She made no other transactions. Compute her gain.

Show the solution

Initial pool: 2,000 shares, cost £5,000.
Bonus 1 for 2: 1,000 new shares at nil cost. Pool becomes 3,000 shares, cost £5,000.
Rights 1 for 3: 3,000 ÷ 3 = 1,000 new shares, cash paid 1,000 × £4 = £4,000.
Pool after rights: 4,000 shares, cost £5,000 + £4,000 = £9,000.
No same-day or 30-day matches, so all 1,600 shares come from the pool.
Cost of shares sold = £9,000 × 1,600 ÷ 4,000 = £3,600.
Gain = £12,000 − £3,600 = £8,400.
Pool carried forward: 2,400 shares, cost £9,000 − £3,600 = £5,400.

Answer: The chargeable gain before reliefs and the annual exempt amount is £8,400. The pool carries forward 2,400 shares at a cost of £5,400.

Exam tips

Set out the matching as a clear working with headings: same day, 30 days, pool. Marks are given for each correct step even if a number is wrong.
Read all dates carefully. A purchase one day after the sale falls under the 30-day rule, even if you think of it as a reinvestment.
Show the pool as a table with shares and cost, updated for each bonus or rights issue in date order.
In Section A scenarios, share disposals often sit inside wider planning. State the gain on shares clearly, then link it to the rates, reliefs and annual exempt amount that the question tells you to use.
Follow the supplementary instructions: work to the nearest £ and show all workings.

Practice questions from Capital gains tax: the basic principles of computing gains and losses

Share Disposals and Matching Rules in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

ACCA Applied SkillsShare Matching Rules for Individuals

Share Disposals and Matching Rules: frequently asked questions

What are the share matching rules for individuals?

A disposal is matched first with shares bought on the same day, then with shares bought in the following 30 days, taking the earliest first. Any remaining shares are matched with the section 104 pool. Each block gives its own gain or loss.

How do I calculate the gain on a share pool?

Add up the number of shares and the total cost in the pool. For a sale, take the pool cost × shares sold ÷ shares in the pool as the allowable cost. Deduct that from the proceeds. The remaining shares and cost stay in the pool.

How is a bonus issue treated for CGT?

A bonus issue gives you extra shares for no payment. It is not a disposal. You add the new shares to the pool and leave the pool cost unchanged, so the average cost per share falls.

How is a rights issue treated for CGT?

Taking up a rights issue is not a disposal. You add the new shares and the cash paid for them to the pool. The pool then holds more shares and a higher total cost.