How to calculate capital gains tax
Capital gains tax is charged on profit, not on the sale price. You take what you sold the asset for, subtract what you paid plus allowable costs, deduct your annual exemption, and tax what is left at the rate for that asset type and your income band.
The rule
CGT = (disposal proceeds − purchase cost − allowable costs − annual exemption) × CGT rate
Do it automatically — Capital gains taxStep by step
- 1Work out the gain: sale price minus purchase price.
- 2Deduct allowable costs such as fees, stamp duty on purchase and capital improvements.
- 3Offset any capital losses, including losses carried forward from earlier years.
- 4Deduct the annual exempt amount, then apply the rate — property is usually taxed higher than shares.
What trips people up
- • Your income determines whether the gain is taxed at the basic or higher CGT rate.
- • Property disposals often have a short reporting-and-payment deadline separate from your annual return.
Common questions
Do I pay CGT on my main home?
Usually no, thanks to main-residence relief, though letting or business use can restrict it.
Can I use my spouse's exemption?
In many jurisdictions transfers between spouses are tax-neutral, effectively doubling the exemption.
Skip the maths
Ballpark CGT on a disposal using the current allowance and rates.
Open the cgt on shares & property tool