calculate uk capital gains tax

How to calculate UK capital gains tax (without the headache)

If you have sold shares, crypto, a second property, or another asset at a profit, you may need to pay UK Capital Gains Tax (CGT). The good news: the calculation is structured, and once you break it into steps, it becomes much easier to understand.

The calculator above gives you a practical estimate. Under the hood, it follows a straightforward flow:

• Work out your gain on disposal.
• Subtract allowable losses and reliefs.
• Apply your Annual Exempt Amount.
• Split remaining gain between lower and higher CGT rates based on unused basic-rate band.

Step-by-step formula

1) Gross gain

Start with what you sold the asset for, then subtract what it cost you to buy and improve it.

Gross gain = disposal proceeds − purchase price − improvement costs − selling costs

2) Net gain after losses and reliefs

Next subtract capital losses (current year and brought forward) and other eligible reliefs.

Net gain = gross gain − losses − reliefs

3) Apply Annual Exempt Amount (AEA)

Individuals generally have an annual CGT allowance (often called the tax-free CGT allowance). In recent years this has been reduced, and many people now use £3,000 as the default figure.

Taxable gain = max(0, net gain − AEA)

4) Apply the correct CGT rates

CGT rates depend on both asset type and your income position:

• Residential property: 18% (lower rate) / 24% (higher rate)
• Most other assets: 10% (lower rate) / 20% (higher rate)

The portion of gain taxed at the lower rate depends on how much of your basic-rate band is still unused after your taxable income.

Worked example

Suppose you sell shares for £100,000. You originally bought them for £60,000, spent £1,000 in transaction costs, and have no losses.

• Gross gain: £100,000 − £60,000 − £1,000 = £39,000
• Net gain: £39,000
• After £3,000 AEA: taxable gain = £36,000

If your taxable income is £30,000 and your basic-rate threshold is £50,270, then £20,270 of basic-rate band remains.

• £20,270 taxed at 10% = £2,027
• £15,730 taxed at 20% = £3,146
• Total estimated CGT = £5,173

Common mistakes people make

• Forgetting allowable costs: Legal fees, broker fees, and certain improvement costs can reduce gains.
• Ignoring losses: Properly recorded losses can significantly lower tax.
• Using the wrong rate: Property and non-property assets can have different rates.
• Not checking timing: Tax year, completion date, and reporting deadlines matter.

Records you should keep

Maintain clear records for every disposal. Ideally keep:

• Purchase and sale contracts
• Broker statements and completion statements
• Invoices for capital improvements
• Evidence of claimed losses and reliefs

Good records make filing easier and protect you if HMRC asks questions later.

Important limitations of this calculator

This tool is designed for quick planning. It does not model every edge case, including:

• Business Asset Disposal Relief lifetime limits and detailed eligibility
• Private Residence Relief apportionment and letting relief scenarios
• Non-resident CGT calculations and rebasing rules
• Trust/company calculations
• Complex share matching rules beyond a simple aggregate approach

Use this as a first-pass estimate, then confirm final numbers with a qualified adviser or HMRC guidance before filing.