Capital Gains Tax Calculator
✓ Verified for 2026/27Gain & Income Details
Capital Gains Tax (CGT) is charged on profits when selling an asset. You have a tax-free allowance of £3,000. CGT rates depend on your other taxable income: basic rate taxpayers pay 18% (18% for property) up to the basic rate threshold, and higher rate taxpayers pay 24% (24% for property).
Capital Gains Breakdown
Expert Guide to Capital Gains Tax (CGT) in the UK
Capital Gains Tax (CGT) is a tax levied on the profit (or "gain") you realize when you sell or dispose of an asset that has increased in value. It is the gain you make that is taxed, not the total amount of money you receive. For example, if you purchase shares for £10,000 and sell them later for £18,000, your gross capital gain is £8,000.
How Capital Gains Tax Bands Work
Your CGT tax band is determined by adding your taxable capital gains to your other taxable income (such as salary, dividends, and pensions). For the 2026/27 tax year, the Personal Allowance is set at £12,570, and the basic rate band extends to £50,270.
- Basic Rate Taxpayer: If your total combined income and capital gains fall below £50,270, you pay the basic CGT rate of 18% on your taxable gains.
- Higher/Additional Rate Taxpayer: Any portion of your taxable capital gains that exceeds the £50,270 threshold is taxed at the higher CGT rate of 24%.
The £3,000 Annual Exempt Amount
Every individual in the UK is entitled to an annual tax-free Capital Gains Tax allowance, officially called the Annual Exempt Amount (AEA). For the 2026/27 tax year, this allowance is £3,000. This means you do not pay any CGT on the first £3,000 of gains you make during the year. This allowance is individual, meaning a married couple has a combined allowance of £6,000, provided they hold assets jointly or transfer shares/properties to each other before making a sale.
Qualifying Deductions to Reduce Your Tax Bill
When calculating your taxable gains, HMRC allows you to deduct specific costs associated with acquiring, improving, and selling your assets. These include:
- Acquisition Costs: Purchase price, legal fees, valuation costs, and Stamp Duty paid when buying the asset.
- Capital Improvement Costs: Expenses incurred to add value to the asset (e.g., building an extension on a property or refurbishing structural components). You cannot deduct general maintenance or redecorating costs.
- Disposal Costs: Estate agent commission, broker fees, legal fees, and advertising costs incurred to sell the asset.
Capital Gains Tax FAQs
How We Calculated This
- Calculate the Gross Capital Gain: Subtract the asset's original acquisition cost (purchase price) from the final disposal value (sale price). You can deduct qualifying capital costs from the gross gain. These include acquisition costs (such as stamp duty, broker fees, and legal costs), improvement costs that added value to the asset (excluding general maintenance or repair costs), and disposal costs (such as estate agent fees, valuation fees, and advertising costs).
- Apply the Annual Exempt Amount (Allowance): For the 2026/27 tax year, deduct the statutory annual tax-free Capital Gains Allowance. This exemption is set at £3,000 per individual. Note that the allowance is a personal entitlement and cannot be carried forward to subsequent tax years; if you do not use your £3,000 allowance within the tax year, it is lost. Spouses and civil partners can, however, transfer assets between themselves tax-free to utilize both of their individual £3,000 allowances.
- Assess the Asset Type and Applicable CGT Rates: Determine the appropriate tax rates based on the asset class. In the 2026/27 tax year, standard assets (such as shares, crypto, and business assets) and residential property are taxed at the same rate. This change was introduced in the Autumn Budget 2024. The cgt rate shares property is now 18% for disposals that fall within your unused basic rate income tax band, and 24% for any gains that exceed the basic rate band threshold.
- Calculate Unused Basic Rate Income Tax Band: To determine whether your gains are taxed at 18% or 24%, calculate your remaining basic rate income tax band. Subtract your total taxable personal income (gross salary, dividends, etc., minus your personal allowance) from the basic rate threshold of £50,270. If your taxable income is less than £50,270, the unused portion of this band can be filled by your capital gains. Any gains that fit within this unused band are taxed at 18%, and the remainder is taxed at 24%.
- Apply Business Asset Disposal Relief (BADR): If the gain qualifies for Business Asset Disposal Relief (formerly Entrepreneurs\' Relief), apply the preferential rates. For disposals made on or after 6 April 2026, the BADR tax rate is 18% (having risen from 10% before October 2024 and 14% during the 2025/26 transition year). This rate applies up to a lifetime limit of £1 million of qualifying gains.
Real-World Examples
This scenario details the exact mathematical calculations for a basic rate taxpayer who sells shares and realizes a gain, showing how the cgt rate shares property is applied to the taxable gain.
Step 1: Gross Sale Price of Shares = £25,000.00
Less Acquisition Cost = £12,000.00
Less Transaction Fees (Broker fees) = £500.00
Net Capital Gain = £25,000.00 - £12,000.00 - £500.00 = £12,500.00
Step 2: Apply Annual Exempt Amount (CGT Allowance):
Taxable Gain = £12,500.00 - £3,000.00 = £9,500.00
Step 3: Determine Taxable Band:
Assume the taxpayer has a gross salary of £30,000.00.
Taxable Income = £30,000.00 - £12,570.00 = £17,430.00
Unused Basic Rate Band = £37,700.00 - £17,430.00 = £20,270.00
(Since the taxable gain of £9,500.00 is fully within the unused basic rate band of £20,270.00, the entire gain is taxed at the basic rate.)
Step 4: Calculate CGT Due:
CGT Rate = 18%
Total Capital Gains Tax Due = £9,500.00 * 0.18 = £1,710.00This scenario details the calculation for a higher rate taxpayer selling a buy-to-let residential property, demonstrating the 24% rate on the taxable gain.
Step 1: Gross Sale Price of Property = £320,000.00
Less Original Purchase Price = £210,000.00
Less Capital Improvement Costs (e.g., extension) = £15,000.00
Less Selling Costs (Estate agent & legal fees) = £5,000.00
Net Capital Gain = £320,000.00 - (£210,000.00 + £15,000.00 + £5,000.00) = £90,000.00
Step 2: Apply Annual Exempt Amount:
Taxable Gain = £90,000.00 - £3,000.00 = £87,000.00
Step 3: Determine Taxable Band:
Assume the taxpayer has a gross salary of £60,000.00 (which is above the basic rate threshold of £50,270).
Because the taxpayer is already in the higher rate tax band, the entire taxable gain is taxed at the higher rate.
Step 4: Calculate CGT Due:
CGT Rate = 24%
Total Capital Gains Tax Due = £87,000.00 * 0.24 = £20,880.00Related Calculators
Frequently Asked Questions & Detailed Tax Guide
What is Capital Gains Tax (CGT) in the UK?
Capital Gains Tax (CGT) is a tax on the profit (gain) you make when you sell or dispose of an asset that has increased in value. It is the gain you make that is taxed, not the total amount of money you receive. For the 2026/27 tax year, individuals get an annual CGT tax-free exemption allowance. Assets subject to CGT include buy-to-let properties, shares not held in an ISA, business assets, and personal items valued over £6,000 (excluding cars).
Step-by-Step Mathematical Calculation: Property Capital Gains
Let’s calculate the CGT due for a basic-rate taxpayer who sells a residential buy-to-let property for £200,000, which they originally purchased for £150,000, and has £10,000 in allowable deductions (estate agent, legal fees, refurbishments):
- 1. Calculate Gross Gain: £200,000 (sale price) – £150,000 (purchase price) = £50,000.
- 2. Deduct Allowable Expenses: £50,000 – £10,000 = £40,000 net gain.
- 3. Deduct Annual CGT Exemption Allowance: Let’s assume an annual allowance of £3,000.
– Taxable Gain: £40,000 – £3,000 = **£37,000**. - 4. Calculate CGT Rate: Residential property gains are taxed at higher rates depending on your income bracket. For basic-rate taxpayers, the rate is lower (e.g. 18%), and for higher-rate taxpayers, it is higher (e.g. 24%). Assuming the gain falls entirely in the higher bracket (24%):
– CGT due: £37,000 * 24% = **£8,880**.
Tax Expert Pro-Tips: Reclaiming CGT via Private Residence Relief
David Vance, CTA FCA, recommends: “Your main home is exempt from Capital Gains Tax under Private Residence Relief (PRR). If you lived in a buy-to-let property before renting it out, you can claim PRR for the years you occupied the property, plus the final 9 months of ownership. Furthermore, if you own assets jointly with a spouse, you can combine your annual allowances, effectively doubling your tax-free gains threshold.”
Legislative References
- Taxation of Chargeable Gains Act 1992 (TCGA 1992) – Primary statutory framework for CGT.
- HMRC Capital Gains Manual (CGM) – Allowable expenses and Private Residence Relief guidelines.