Advanced Taxation (UK) · Corporation tax: chargeable gains for companies

Share Pooling and Matching Rules for Companies in ATX-UK

Updated 11 October 2026 · Fact-checked

When a company sells shares, you match the disposal against acquisitions in a set order: first the same day, then the nine days before the disposal (earliest first), then the section 104 pool. Each matched block gets its own gain. Pool cost is indexed only up to December 2017.

Understand Share Pooling and Matching Rules for Companies

A company often buys shares in the same company at different times and prices. When it sells some, you must decide which shares were sold. Tax law answers this with fixed matching rules. You cannot choose.

For companies the order is: (1) acquisitions on the same day as the disposal; (2) acquisitions in the nine days before the disposal, taking the earliest first (FIFO); (3) the section 104 pool, which holds all other shares of the same class in the same company. The nine-day rule looks backwards only. This differs from individuals, who have a 30-day rule that looks forward, and who do not get indexation.

The section 104 pool treats all the shares as one asset. You track the number of shares, the actual cost and the indexed cost. When a company buys more shares, you add the number and cost to the pool. When it sells from the pool, you remove a proportion of the number, cost and indexed cost, based on shares sold ÷ shares in the pool.

Companies get indexation allowance on gains, but it is frozen at December 2017. Indexation runs from the month of acquisition to December 2017 (or to the date of disposal if earlier). For a share bought after December 2017 there is none. Indexation can reduce a gain to nil but cannot create or increase a loss. The exam will give you the indexation factors or RPI figures.

Shares acquired and sold may qualify for the substantial shareholding exemption, in which case no gain arises at all. Always check that first, then apply the matching rules to any disposal that is not exempt.

Key rules to remember

Matching order for companies: 1. Same day → 2. Previous 9 days (earliest first) → 3. Section 104 pool; The nine-day rule looks back from the disposal date only. There is no 30-day forward rule for companies.
Indexed pool, adding shares: New indexed cost = indexed cost b/f + indexation to date of purchase + cost of new shares; Do this at every acquisition up to December 2017. After that, add new shares at cost only.
Pool disposal proportion: Cost removed = pool cost × shares sold ÷ shares in pool; indexed cost removed = indexed pool × shares sold ÷ shares in pool; Use the pool as it stands immediately before the disposal.
Gain on a matched block: Gain = proceeds − allowable cost − indexation allowance; Indexation allowance = indexed cost − cost. It cannot create or increase a loss.
Indexation freeze: Indexation allowance is calculated only up to December 2017; A disposal in 2025/26 gets no extra indexation after that date.

How to solve Share Pooling and Matching Rules for Companies questions

Use this method for any question asking for the chargeable gain on a company share disposal.

1Check for the substantial shareholding exemption. If it applies, there is no gain or loss and no matching is needed.
2List the disposal date, number of shares and proceeds. Work out the proceeds per share.
3Match the disposal first with same-day acquisitions, then with acquisitions in the nine days before the disposal, earliest first.
4Match whatever remains with the section 104 pool.
5Build the pool: number of shares, cost and indexed cost. Index at each acquisition date up to December 2017 using the factors given.
6For each matched block, compute proceeds less cost less indexation. Work out indexation only for the pool, or for blocks acquired before December 2017.
7Add the gains and losses together to get the total chargeable gain, and carry forward the remaining pool balances. Show every working and a total check on proceeds.

Quickest way: Block-by-block shortcut

When to use it: Use this when the question gives several purchases close to the sale date and you are short of time.

Write the disposal date and mark the date nine days earlier. Anything in that window, or on the day, is matched before the pool.
Put the shares in three columns: same day, nine days, pool. Check the share numbers add up to the number sold.
Calculate the pool first on a separate sheet in the order of purchase dates. Remember shares in the matched blocks are excluded from the pool.
Share proceeds by number of shares, not by cost. Compute each gain, then add them and check total proceeds equal the amount in the question.

Common mistakes in Share Pooling and Matching Rules for Companies

Applying a 30-day forward rule to a company.
Students mix up the individual CGT rules with the corporation tax rules.
Fix: For companies, look back nine days from the disposal. Acquisitions after the disposal go to the pool.
Putting shares bought in the nine-day window into the pool.
The pool feels like the default method and students stop reading the dates.
Fix: Count the days between purchase and sale first. Use the earliest purchase first if there are several in the window.
Indexing the pool beyond December 2017.
Students remember indexation but forget it was frozen.
Fix: Stop indexation at December 2017. Later purchases are added at cost, and the disposal itself adds no extra indexation.
Forgetting to index the pool before adding a new purchase.
Students add costs first and apply one indexation figure at the end.
Fix: Update the indexed pool by the factor to the month of each purchase, then add the new cost.
Using indexation to create or increase a loss.
Students subtract the indexed cost from proceeds without checking the result.
Fix: Compare proceeds with actual cost. If there is a loss on cost, indexation does not increase it.
Leaving matched shares in the pool.
Students build the pool from all purchases without removing blocks already matched.
Fix: Remove same-day and nine-day shares from the pool before you do the pool workings.

Worked examples

Example 1

Z Ltd sold 5,000 shares in Q plc on 20 March 2026 for £30,000. It bought 800 shares on 20 March 2026 for £4,000 and 1,200 shares on 14 March 2026 for £6,000. Before these purchases it held a section 104 pool of 10,000 shares with a cost of £20,000, all bought after December 2017 (so no indexation). Calculate the total chargeable gain.

Show the solution

Proceeds per share: £30,000 ÷ 5,000 = £6.
Same day: 800 shares. Proceeds £4,800, cost £4,000, gain £800.
Nine days before: 14 March is six days before 20 March, so it is in the window. 1,200 shares. Proceeds £7,200, cost £6,000, gain £1,200.
Pool: shares left to match = 5,000 − 800 − 1,200 = 3,000. Proceeds £18,000. Cost = £20,000 × 3,000 ÷ 10,000 = £6,000. No indexation. Gain £12,000.
Check: proceeds £4,800 + £7,200 + £18,000 = £30,000. Total gain £800 + £1,200 + £12,000 = £14,000.
Pool carried forward: 7,000 shares, cost £14,000.

Answer: The total chargeable gain is £14,000.

Example 2

A Ltd bought 10,000 shares in R plc in June 2010 for £20,000 and 5,000 shares in September 2014 for £15,000. It sold 6,000 shares on 1 November 2025 for £42,000. Assume the indexation factors are: June 2010 to September 2014, 0.110; September 2014 to December 2017, 0.080. Calculate the gain.

Show the solution

Check for matching: no same-day or nine-day purchases, so the whole disposal is from the pool.
June 2010: 10,000 shares, cost £20,000, indexed cost £20,000.
Index to September 2014: £20,000 × 0.110 = £2,200. Indexed cost £22,200.
Add September 2014 purchase: shares 15,000, cost £35,000, indexed cost £22,200 + £15,000 = £37,200.
Index to December 2017: £37,200 × 0.080 = £2,976. Indexed cost £40,176. No indexation after December 2017.
Disposal of 6,000 ÷ 15,000 = 40%. Cost = £35,000 × 40% = £14,000. Indexed cost = £40,176 × 40% = £16,070 (to the nearest £).
Gain = £42,000 − £16,070 = £25,930. This is after indexation allowance of £2,070 (£16,070 − £14,000).
Pool carried forward: 9,000 shares, cost £21,000, indexed cost £24,106.

Answer: The chargeable gain is £25,930.

Exam tips

Draw a timeline of the purchase dates against the disposal date. It makes the nine-day window obvious and takes seconds.
Always show the pool workings in columns: shares, cost and indexed cost. Marks go for the method even if a factor is misread.
Cover SSE first. A question about a trading company shareholding may be testing whether you notice an exemption rather than the matching rules.
In Section A, comment on planning where relevant, for example that a company cannot avoid matching rules by selling and rebuying shares within the window. This earns professional skills marks.
Round to the nearest £ and state your assumptions, as the supplementary instructions require.

Practice questions from Corporation tax: chargeable gains for companies

Share Pooling and Matching Rules for Companies 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 SkillsShares and Securities Matching and Pooling

Share Pooling and Matching Rules for Companies: frequently asked questions

What are the share matching rules for companies?

A company's disposal is matched first with shares acquired on the same day. Next come shares acquired in the nine days before the disposal, earliest first. Anything left comes from the section 104 pool.

How is the company share pool different from the individual pool?

The company pool is indexed up to December 2017 and tracks an indexed cost as well as actual cost. Individuals have no indexation. Individuals also match with acquisitions in the 30 days after the disposal, while companies do not.

Does indexation still apply to company gains?

Yes, but only up to December 2017. Indexation allowance stops at that date even if the shares are sold much later. It can reduce a gain to nil but it cannot create or increase a loss.

What happens to shares bought after the disposal?

For a company, shares bought after the disposal are not matched with it. They go into the section 104 pool for future disposals.