How the Capital Gains Tax UK Calculator works
UK Capital Gains Tax (CGT) is charged on the profit you make when you dispose of a chargeable asset — shares, funds, a second property, or other investments — not on the total sale proceeds. This calculator applies the standard HMRC method: it nets your gains against losses and the tax-free annual exempt amount, then splits whatever remains between the 18% basic-rate band and the 24% higher-rate band based on your other income.
The formula
The calculation runs in four steps:
- Net gain = total capital gains − capital losses for the year.
- Taxable gain = net gain − annual exempt amount (floored at zero; the allowance cannot create a negative gain or carry forward).
- Remaining basic-rate band = £37,700 − other taxable income (floored at zero). This is the slice of the UK basic-rate income tax band your other income has not already used up.
- Tax due = (taxable gain that fits in the remaining basic-rate band × 18%) + (any taxable gain above it × 24%).
In short: CGT = min(taxable gain, remaining basic band) × 18% + max(0, taxable gain − remaining basic band) × 24%.
Worked example
Say you realise £20,000 of gains on shares, with no losses to offset, £30,000 of other taxable income, and the standard £3,000 annual exempt amount. The taxable gain is £20,000 − £3,000 = £17,000. Your remaining basic-rate band is £37,700 − £30,000 = £7,700, so £7,700 of the gain is taxed at 18% (£1,386) and the remaining £9,300 is taxed at 24% (£2,232). Total CGT due is £3,618, an effective rate of about 21.3% on the taxable gain.
Key assumptions and scope
- Tax year basis: the calculator uses the £3,000 annual exempt amount and 18%/24% rates that have applied to most chargeable assets, including residential property, since these rates were unified in the 30 October 2024 Budget. Adjust the exempt amount field if you are working with an earlier tax year.
- "Other taxable income" is taxable income, not gross income — it should already reflect your Personal Allowance and any other income tax deductions, since that is the basis HMRC uses for the £37,700 basic-rate band.
- Business Asset Disposal Relief, Investors' Relief, and main-residence relief are not modelled. Qualifying business disposals or your only home can carry different rates or full exemption — check eligibility separately.
- Losses: the calculator only nets current-year losses you enter. Losses reported to HMRC in prior years and carried forward should be added into the losses figure manually.
What moves the tax bill most
Because the split between 18% and 24% depends on your other income, the same gain can be taxed very differently depending on how much of the basic-rate band is already used. A gain that lands entirely below the £37,700 threshold (after accounting for other income) is taxed at 18% throughout; a gain realised on top of income that already exceeds that threshold is taxed at 24% throughout. Losses and the annual exempt amount reduce the taxable gain directly, which is why timing disposals — and using losses in the same tax year where possible — can materially change the result.