How to sell stocks and shares in the UK

There are various ways of ensuring that selling up aligns with your wider investment goals and many avenues for those who want to sell. 

The more you understand what selling shares involves, the less likely you will lose money unnecessarily. 

Generally, buying stocks and shares is a long-term investment move. 

So, when you’re considering selling up, it will have a big impact on your investment strategy. 

There’s no set way of selling shares, but those knowledgeable about the process will be better equipped to handle it.   

How to sell shares

Most people planning to sell shares do so via a UK brokerage or investment platform, which offers the option of selling shares online, on an app or over the phone (the latter may incur extra fees).  

Before selling up, you’ll be able to see how much you’ll receive before proceeding with the sale.   

The exceptions to the above are those that own private equity shares and opt to sell them directly to another investor. 

In these circumstances, a brokerage service is not needed, but the private company involved will usually have to approve the sale. 

We’ll now run through below what you must do before selling shares. 

• Make sure selling shares is right for you: A financial adviser can help you decide if selling shares now aligns with your long-term investment goals.
• Have a plan of action: You’ll need to consider how selling shares will impact the rest of your investments, including whether you’ll still have a diversified portfolio.
• Log in to your online investment account: Then, find the shares you want to sell, which you can do online or via an app. Alternatively, you can sell them over the phone.
• Have a final review before selling: In most cases, you can see how much you’ll get before selling your shares – if you’re happy with the price, go ahead and sell.

When should I sell my shares and why do people sell them?

There are many reasons why investors might want to sell their shares, but the most likely reason is that something drastic has changed. 

Depending on your own experience, you should consider how valid your reasoning is behind selling up, as rash decision-making and stocks and shares trading don’t tend to go hand in hand. 

So, if you’ve spotted the share price has dropped in a company you’re investing in, selling up immediately isn’t necessarily the correct response. 

You should take the emotion out of it and not sell because of impatience, excitement or fear.  

You should also consider whether a share price drop is likely to be short-term or in response to one-off bad news, to which a solution may already be in the works.  

There are, of course, plenty of viable reasons why you might want to sell your shares. 

A company you are invested in might be undertaking large-scale corporate restructuring or made some vital decisions you disagree with, or you believe management is irresponsible.  

It may be simpler. The company you own shares in may have deteriorated in value due to poor performance compared to its competitors for some time, and you decided to cut your losses. 

Alternatively, you might want to balance out your portfolio and sell shares in one sector to fund the purchase of those in another. 

And we must not forget sometimes investors need access to cash and selling shares to liquidate their holdings is a way to do this. 

What platform should I use to sell shares?

The cost of selling shares is dependent on which platform you use.

Although some online platforms won’t charge you, most brokerages will charge a commission for trading in your shares — either as a flat fee, or a percentage.  

Before selling up, it’s important for you to look into what fee you’ll be charged through your brokerage by doing so.

This can influence whether you sell all of your shares in one go — to avoid multiple charges — or sell them off gradually, if there are no charges on your sales.

Learn more: what is CFD trading?

How long does it take to sell shares and receive funds? 

Once your sell order has been processed and completed, it usually takes two to three working days to receive your funds in your account with your brokerage or investment platform.  

You can usually then withdraw the cash or reinvest it if you prefer.

How to use order types to sell shares 

If you’re selling your shares, a priority should be to limit your losses, but this may be impacted by how keen you are to sell and at what price. 

For example, you could use a market order to sell at any price as soon as possible, even if it’s not your desired price. 

You have options if you’re more specific about the price point you’re selling at. 

A limit order allows you to sell a share when it reaches a certain price or above that price, while a stop order is for when a share reaches a pre-set price or falls below it. 

Finally, a stop-limit order can be used to sell shares at a set price – but only if this is the minimum you want.  

If you’re selling through a brokerage or investment platform, you may be able to specify how long your sell order is open. 

For example, your sell order may expire if your shares are not sold by the end of the day or until they are sold (with a time limit), or your order could be cancelled if shares are not immediately sold.

Are there any taxes I should look out for?

Alongside brokerage fees, selling your shares could result in tax charges, depending on how much money you make from the sale and the type of account you hold them in.

If your shares are held in a stocks and shares individual savings account (ISA), there will be no tax to pay. However, if they were in a general investment or trading account and you made a profit during your ownership, you may need to pay capital gains tax (CGT) on the sale.

However, everyone has a tax free allowance for gains before CGT will be charged, which is currently £3,000 a year (or £1,500 for trusts).

CGT will be charged on gains in excess of the allowance at a rate of 18% if you still fall within the basic rate tax bracket or 24% if you are in the higher or additional tax band.

If you sell your shares because they have dropped in value, you won’t need to pay tax as there has been no capital gain. It’s still a good idea to report these losses to HMRC, as you may be able to use them in the future by offsetting them against gains to reduce a CGT bill further down the line.  

Can I transfer my shares into an ISA without selling them? 

Yes, you can via a process known as Bed and ISA. 

This is when you sell investments held in a brokerage account and buy them back in an ISA. 

Bed and ISA allows you to protect your income and any future growth from capital gains and income tax. You can also use your annual ISA allowance of £20,000. 

You can usually do Bed and ISA via an online investment platform, which can take up to 10 working days.  

Before you start the process, it’s worth stressing any profits from investments in your brokerage account may be subject to CGT.  

Still want to sell your shares?  

Selling shares is a big decision that can impact your investment journey. Before doing so, it helps to get expert advice on how to proceed. 

Unbiased can quickly connect you with a financial adviser regulated by the Financial Conduct Authority (FCA) who can support you with your investment portfolio and strategy.