What this estimator works out
This estimator works out a taxable gain: what you sold something for, less what it cost you, less allowable expenses, less any losses you are offsetting, less the annual exempt amount.
It produces the gain figure that tax would be charged on. It does not calculate the tax itself, because the rate depends on the type of asset and on your income tax band — which the section below explains.
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Before you calculate
- Check whether the asset is chargeable at all. Your main home is usually exempt through Private Residence Relief, as are cars, ISA holdings and most personal possessions sold for under £6,000.
- Gather the original acquisition cost, including purchase fees. For inherited assets, the cost is normally the value at the date of death.
- Identify allowable costs — buying and selling fees, legal costs, stamp duty and capital improvements. Routine maintenance and mortgage interest do not qualify.
- Check the current annual exempt amount on GOV.UK. It has been reduced substantially in recent years and the default here may be out of date.
Capital losses can be set against gains in the same year, and unused losses can be carried forward indefinitely — but generally only if you report them to HMRC, usually within four years. A loss you never declared is a loss you cannot use later.
How this calculator works
Two subtractions, in a specific order:
Gain = sale proceeds − original cost − allowable costs
Taxable gain = gain − losses offset − annual exempt amountThe annual exempt amount is applied last, after losses. If the result would be negative it is shown as zero, since a gain cannot be less than nothing for this purpose.
The rate charged on the taxable gain depends on the asset and on how much of your basic rate band remains once your income is taken into account. Residential property is charged at higher rates than other assets. Because that interaction is genuinely complicated, this tool stops at the gain.
Worked example: shares sold for £25,000
Using the default figures — £25,000 of proceeds, a £15,000 original cost, £500 of allowable costs, no losses and a £3,000 annual exempt amount:
- Gain: £25,000 − £15,000 − £500 = £9,500
- Taxable gain: £9,500 − £0 − £3,000 = £6,500
The £6,500 is what tax would be charged on, not the tax due. Note how much difference the exempt amount makes: when it stood at £12,300 a few years ago, this disposal would have produced no taxable gain at all. Reductions to the allowance have brought many ordinary disposals into charge for the first time, which is why checking the current figure matters more than it used to.
Common mistakes
- Using an out-of-date exempt amount. It has fallen sharply in recent years.
- Including costs that are not allowable. Maintenance, decorating and mortgage interest do not count; capital improvements do.
- Forgetting to report losses. Unreported losses generally cannot be carried forward.
- Missing the reporting deadline on property. UK residential property disposals must usually be reported and paid within 60 days of completion, separately from Self Assessment.
- Assuming transfers between spouses are disposals. They are normally made on a no-gain, no-loss basis, which is often useful for using both exempt amounts.
Frequently asked questions
What rate will I actually pay?
It depends on the asset and your income. Gains are effectively stacked on top of your income, so any part falling within your remaining basic rate band is charged at the lower rate and the rest at the higher rate. Residential property attracts higher rates than other assets. Current rates are published on GOV.UK, and because they have changed more than once recently, check rather than assume.
Do I pay capital gains tax on my home?
Usually not. Private Residence Relief normally exempts the sale of your only or main home, provided you have lived in it throughout and have not used part of it exclusively for business. Second homes, buy-to-let property and homes let out for part of the ownership period may attract a charge on some or all of the gain.
What about shares held in an ISA or pension?
Gains inside an ISA or a pension are not subject to capital gains tax at all. This is one of the strongest arguments for using the ISA allowance before investing outside a tax wrapper, particularly now that the annual exempt amount is much smaller.
When do I need to report a gain?
UK residential property disposals generally need reporting and paying within 60 days of completion. Other gains are usually reported through Self Assessment. You may also need to report where proceeds exceed a threshold even if no tax is due. GOV.UK sets out the current requirements.
Should I get professional advice?
For anything beyond a straightforward share disposal, yes. Property, business assets, inherited assets, partial disposals and anything involving reliefs are areas where a mistake is expensive and an accountant usually pays for themselves. This estimator is a starting point, not a substitute.
Related tools
References
- GOV.UK — capital gains tax rates, the annual exempt amount, reliefs and reporting deadlines
- HM Revenue & Customs — reporting a gain and claiming losses
- MoneyHelper — general guidance on tax on savings and investments
Sources are checked at publication and can change — how I choose and check references.