Capital Gains Tax UK Calculator

Created by Wei Bin Loo
Reviewed by Tibor Pal, PhD candidate and Steven Wooding
Last updated: Nov 21, 2022

With this capital gains tax UK calculator, we aim to help you to calculate the capital gains tax you need to pay when selling your investment in the UK.

We have written this article to help you understand what is capital gains tax and how to determine the capital gains tax rate and calculate capital gains tax in the UK.

Besides common investments such as shares, we will also look at capital gains tax on property and cryptocurrency investments. You can use our rental property calculator and cryptocurrency footprint calculator to understand more about these topics. This article will also include some calculation examples to help you understand the computation.

💡 Please note that no capital gains tax is chargeable on gains made from your primary residential property (i.e., the house you live in most of the time).

What is the capital gains tax rate?

Capital gains tax is the amount of tax you have to pay when you make a profit from selling your assets. Almost everything falls into this category. Besides shares, you will also have to pay the capital gains tax (CGT) when you sell property, cryptocurrency, and even jewelry and vintage cars.

Several factors affect your capital gains tax rate, and hence the amount of CGT you are to pay:

  • The amount of profit you gain from the sale;
  • Your total annual income; and
  • The type of assets that you are selling.

Please check out our profit calculator and annual income calculator to understand more.

How to use our UK capital gains tax calculator?

Our capital gains tax UK calculator is very easy to use. You can compute the capital gains tax you need to pay on different types of investments in just four steps:

  1. Determine your capital gains.

    The first step is to input the profit you get from selling your investment, which is the capital gains.

  2. Determine your total annual income.

    The next step is to determine your total annual income. You can calculate this by inputting your annual salary and other sources of income that you have. The calculator will sum up the two and compute the total annual income for you.

  3. Select the asset type.

    Then, you need to select the asset that you are selling. You have four different choices: Shares, Property, Cryptocurrency, and Others. You need to choose the right assets, as they all have different capital gains tax rates.

  4. Select the if the asset is in a trust.

    As a trust has a lower capital gains tax allowance, so you need to select this if the assets you invested in are in a trust.

  5. Understand your capital gains tax and profit after tax.

    Now, you should be able to see how much capital gains tax you need to pay. Our calculator will also calculate your profit after tax, which is the profit you will gain after paying your CGT at the correct capital gains tax threshold.

How does the capital gains tax calculation work? What are the capital gains tax thresholds?

The capital gains tax calculation is not too complicated, but you do need to understand its structure to grasp the concept entirely. In general, there are a few principles that are applied in the computation:

  • If the profit you gained from the sale is below the capital gains tax allowance, which is £12,300, you don’t need to pay any capital gains tax.

  • You will have different capital gains tax thresholds and need to pay different capital gains tax rates when you sell different assets. In general, there are four types of capital gains taxes:

    • Capital gains tax on shares;
    • Capital gains tax on property;
    • Capital gains tax on cryptocurrency; and
    • Capital gains tax on other assets.
  • There are two tiers of capital gains tax rate. You will need to pay a higher rate if your total annual income is higher than £50,270.

You can refer to the table below for more detail on the capital gains tax rates.

Assets type

Basic rate

Higher rate

Shares

10%

20%

Property

18%

28%

Cryptocurrency

10%

20%

Other

10%

20%

Now, let’s look at some examples to help you understand it better.

  • If your total annual income is higher than £50,270 and you are selling a house with a profit of £40,000, you will need to pay a higher tax rate of 28%. As the capital gains tax allowance is £12,300, your taxable profit will be £37,700. Hence, your capital gains tax will be £27,700 × 28% = £7,756.

  • Let’s say now your total annual income is lower than £50,270, say £45,000, and you are selling a house with the same profit of £40,000. Your taxable profit will remain the same at £27,700.

    However, you will only be required to pay 18% for the first £50,270 - £45,000 part of your profit, which is equivalent to (£50,270 - £45,000) × 0.18 = £949.

    For the next £27,700 - £949 = £22,430 you will still need to pay 28%, which equals to £22,430 × 0.28 = £6,280.

    Thus, in total, you will pay is £949 + £6,280 = £7,229, which is £527 less than the previous example.

Sounds too complicated? Worry not. All you need is to put the correct number into our capital gains tax UK calculator, and you will get your capital gains tax and your profit after tax in no time.

FAQ

What is a capital gain?

A capital gain is defined as the profit you gain when you sell an asset. You will have a capital gain when the selling price is higher than the purchase price.

How much is the capital gains tax allowance?

The capital gains tax allowance is £12,300, starting from the tax year 2021/22. You are not required to pay capital gains tax on any profit you gain that is less than £12,300.

What happens if I don't pay the capital gains tax?

In the UK, it is illegal to avoid paying the capital gains tax. The HMRC will first issue a warning if sellers fail to declare capital gains tax. If they fail to pay it within the 30-day deadline, they could face a penalty and be liable for any interest owed on the payment.

What assets do I need to pay the capital gains tax for when I sell it?

You will need to pay the capital gains tax for every asset that you gain a profit from for more than £12,300 when you sell it. The assets can be property, shares, cryptocurrency, jewellery, vintage cars, and many more!

What factors affect your capital gains tax?

The amount of capital gains tax that you have to pay is based on the following factors:

  • Your profit from selling your investment;
  • Your total annual income; and
  • The asset type that you are selling.

Can the capital gains tax be negative?

No, the capital gains tax cannot be negative as this means that the government will be paying you money.

How do I calculate my capital gains?

You can calculate your capital gains in four steps:

  1. Determine the asset that you are looking at.

  2. Determine the purchase price of the asset.

  3. Determine the sold price of the asset.

  4. Apply the total capital gains formula:

    capital gains = sold price - purchase price.

Wei Bin Loo
Capital gains
Capital gains
£
Asset type
Shares
Are the assets in a trust?
No
Total annual income
Annual income
£
Other income
£
Total annual income
£
Capital gains tax
£
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