Capital Gains Tax Calculator

How Capital Gains Tax Is Actually Calculated

Capital Gains Tax is charged on the gain, not on the amount you receive. That single distinction accounts for most of the confusion around it. If you sell shares for £20,000 that you bought for £14,000, the £20,000 is not what gets taxed. The £6,000 gain is, and even then only the part of it left after your annual exempt amount.

The calculation runs in a fixed order. Start with the disposal proceeds, subtract the original acquisition cost, subtract allowable costs such as stamp duty, broker fees, legal fees and capital improvements, then subtract any capital losses from other disposals in the same tax year. What remains is the gain. Take off whatever is left of your annual exempt amount, and the balance is taxable.

Your rate depends on your income

The taxable gain is stacked on top of your income for the year to decide which rate applies. Any part of it falling within your remaining basic rate band is charged at the lower rate, and anything above at the higher rate. This is why two people with an identical gain can owe very different amounts, and why a single gain is often taxed at two rates at once rather than one.

It also explains why timing matters so much. Because the exempt amount resets each tax year and cannot be carried forward, splitting a large disposal across two tax years gives you two allowances instead of one. Transfers between spouses and civil partners are normally free of CGT, which gives a couple access to both exempt amounts and both basic rate bands.

Different assets, different rules

Shares held in a pool are matched to disposals using same-day and 30-day rules before falling back to an average cost, which is why selling and rebuying the same holding rarely achieves what people expect. Property carries its own reporting deadline of 60 days from completion, separate from your tax return, and may qualify for Private Residence Relief. Crypto follows the same pooling approach as shares, with each token type pooled separately.

What is outside CGT entirely

Gains inside an ISA or pension are not chargeable at all, so no reporting is needed and the exempt amount is irrelevant. Your main home is normally covered by Private Residence Relief. Gilts and most personal possessions sold for under £6,000 are also exempt. Everything else, including second properties, shares held outside a wrapper, crypto and business assets, falls within the regime.

The calculators above apply the correct cost rules for each asset type. This is general information rather than tax advice, and HMRC guidance is definitive.