Guide
Capital Gains Tax: work out your gain, tax and next step
Start with the gain on the disposal, then combine the year’s relevant gains and losses. The amount received from a sale is not normally the amount charged to Capital Gains Tax.
Quick answer
For 2026/27, most UK-resident individuals have a £3,000 annual exempt amount. Ordinary taxable gains above available losses and that allowance are charged at 18% within the unused relevant UK basic-rate band and 24% above it. Special assets, reliefs and residence rules can change the calculation.
On this page
Start with the correct gain
For a straightforward purchase and sale, the starting gain is proceeds less allowable acquisition cost and permitted costs. Joint owners calculate their own share. Gifts, inheritances, connected-party sales, old assets and employment-related shares can require a different basis.
A simple illustration: £20,000 proceeds less £12,000 acquisition cost and £500 eligible costs gives £7,500 gain before losses and annual allowance. It is not £20,000 of taxable income. Do not deduct an expense twice if it is already included in another figure.
Shares bought at different times and crypto transactions can need matching or pooling before the gain is known. The simple helper does not replace those rules.
Combine the year, then apply losses and the allowance
Work out supported gains for all relevant disposals in the tax year, 6 April to 5 April. Use current-year allowable losses against that year’s gains. Earlier losses are then used only as needed to reduce the remaining gain to the annual exempt amount.
The £3,000 individual annual exemption is one allowance for the year, not one per property, broker account or sale. Some FIG or Overseas Workday Relief claims remove entitlement to it; companies, trusts and estates have different rules. Choose the correct scope before applying a standard individual allowance.
Your income determines how much gain is at 18% or 24%
First calculate the relevant taxable income after Income Tax allowances and reliefs. Ordinary gains can use the unused UK basic-rate band. Income at nil savings or dividend rates can still occupy that band. Eligible gross pension and Gift Aid contributions can extend it.
For CGT, Scottish taxpayers use the statutory rest-of-UK assumption to determine this band; do not substitute the Scottish higher-rate salary threshold. The CGT gain is a separate layer, not another salary to which employee NI is added.
Two HMRC examples, recomputed
In 2026/27, assume £20,000 taxable income, no losses and ordinary gains of £12,600 before the annual exemption. The £3,000 allowance leaves £9,600. It fits within the unused basic-rate band, so £9,600 × 18% = £1,728.
Keep £20,000 taxable income but use £52,600 gains. After the allowance, £49,600 is chargeable. The remaining UK basic band is £37,700 − £20,000 = £17,700. Tax is £17,700 × 18% plus £31,900 × 24% = £10,842.
These published examples concern ordinary gains and assume the standard individual exemption is available. A special relief or different income figure needs a separate calculation.
Reporting is a separate question from tax due
UK residential property with tax payable can require a report and payment within 60 days of completion. Other gains have their own Self Assessment or eligible real-time reporting routes. Do not wait for a provider or HMRC to send an automatic bill before checking the obligation.
If already registered for Self Assessment, total chargeable disposal proceeds above £50,000 can require reporting even when gains are below the allowance. Loss claims and non-resident property disposals also have separate rules. A zero tax estimate therefore cannot confirm that no action is needed.
Keep the calculation reviewable
Retain disposal and acquisition dates, quantities, ownership, proceeds, allowable costs, matching or valuation workings, relief claims, losses and any tax already paid. Keep a source for the annual income estimate used to determine the rate.
The calculator explains the annual ordinary-gain result and use of losses. It does not validate specialist cost bases or submit a return. If a field depends on an unresolved property relief, share matching or residence question, resolve that item through the relevant official guidance before treating the result as your filing figure.
What to do next
- Establish the correct disposal date, ownership share and allowable tax cost.
- Combine the year’s gains and eligible losses before using one annual allowance.
- Check the reporting deadline separately, especially for UK residential property.
- Reconcile each gain with purchase, sale, fee and relief records.
- Estimate the supported annual liability using the full income picture.
- Use the official reporting/payment service by the applicable deadline.
Try the tool
Put the explanation into your own figures
Check the tool’s supported scope, keep the assumptions with the result, and use the official route when you need to report or pay.
About this guide
Written by Dan. Dan has spent 20 years working across payroll, HR, benefits and reward. IsMyPayRight is an independent personal project, not connected with any employer or with HMRC.
AI tools help with research and drafting. The official sources used are listed at the end of the guide.
This is general guidance, not a professional review of your circumstances. Read our editorial process and the corrections log.
Methodology and sources
See how the calculations work, which sources they use, how results are tested, and which payroll details the estimates cannot verify.
Common questions
- Do I pay Capital Gains Tax on all the sale proceeds?
- The starting point is normally the gain after the correct acquisition cost and permitted costs, not the whole sale price. Annual losses, exemptions, reliefs and income then determine the CGT liability.
- Is the £3,000 CGT allowance available for each sale?
- It is normally one individual annual exempt amount for the whole tax year, not per sale or account. Residence and relief exceptions, trusts, estates and companies need separate rules.
Official sources
Use these references to check the rules behind this guide. Check the tax year and your circumstances before applying an example to your own pay.