You may have to pay Capital Gains Tax when you sell or dispose of an asset. Work out the gain or loss separately for each asset. Then add everything together to get the overall gain or loss for that tax year and see if Capital Gains Tax is due.
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It's useful to work out your gain or loss at the time you sell or dispose of an asset. This will help you:
You'll need the following information to work out your gain or loss and, if necessary, complete your tax return.
For example the size and location of the property, the type and number of shares, the age of an antique.
The date you sold, gave away or otherwise disposed of the asset.
This is usually the amount you received for the asset, but it may be the market value instead (for example if you gave the asset away) - see more in the 'Using market value' section below.
The date you bought, were given or otherwise acquired the asset.
This is usually the amount you paid for the asset, but it may be the market value instead (for example if you inherited the asset) - see more in the 'Using market value' section below
Expenses associated with buying and selling the asset, such as stockbrokers' fees or money you've spent on improvements to increase the value of the asset (for example, an extension to a house).
This might include Private Residence Relief if you're selling your own home or Entrepreneurs' Relief if you're selling your business.
See how Private Residence Relief works when you sell your own home
Find out about Entrepreneurs' Relief and your business assets
You must work out the gain or loss separately for each asset you sell or dispose of. If you have to complete a Self Assessment tax return and the Capital Gains Tax summary pages (form SA108), you must attach each calculation with your tax return.
In straightforward cases, you take the disposal proceeds (usually the amount received) and deduct your costs and reliefs. This gives you the net gain or loss for each asset.
In some cases, you may need to use the market value of the asset (instead of the sale or purchase price). See the 'Using market value' section below.
Mrs B sells a valuable painting in June 2010 for £60,000.
She bought it in May 2000 for £40,000.The net gain is £20,000 (£60,000 - £40,000).
Mr F sells some shares in January 2011 for £30,000.
He bought them in March 1999 for £40,000.
The net loss is £10,000 (£30,000 - £40,000).
He'll need to tell HMRC about the loss if he wants to use it to offset other gains.
See more on what to do if you've made a loss
You can find detailed step-by-step guides on how to calculate each gain or loss on various types of assets (such as shares and property) in the links below.
You can also download a working sheet and use it to calculate straightforward gains and losses.
If you file your tax return online, you'll find an electronic version of the working sheet that works out some of the numbers for you.
Download a working sheet to help calculate your gain or loss (PDF 22K)
How to calculate capital gains or losses on property
How to calculate capital gains or losses on shares
How to calculate capital gains or losses on personal possessions
How to calculate capital gains or losses on business assets
Sometimes you need to use the market value of the asset instead of the sale or purchase price.
Here are some common examples of when to use market value.
You only pay tax on any gains made since 31 March 1982. So if you owned an asset on 31 March 1982, you work out the gain or loss using its value at that date instead of its actual cost.
You only pay Capital Gains Tax if you sell or dispose of an asset after you inherit it and make a gain. In this case, you use the market value of the asset at the date of death, if inherited after 31 March 1982.
You'll need to use the market value if you've given away an asset after 31 March 1982 - or if you've sold or disposed of an asset you received as a gift after 31 March 1982. There are different rules if you made a gift to your spouse or civil partner (see the link below).
See how gifts and inherited assets are treated for Capital Gains Tax purposes
Once you've worked out all of your individual gains and losses - for each asset you've sold or disposed of - you'll need to work out the overall gain to see if it's above the tax-free allowance. In most cases:
Mr P made a gain of £20,000 on a property he sold in July 2010.
He also sold some shares in July 2010 making a gain of £50,600.
His total gains for 2010-11 are £70,600 (£50,600 + £20,000).
The Annual Exempt Amount for individuals for 2010-11 is £10,100.
Mr P's gains are above this amount so he has Capital Gains Tax to pay on £70,600 less any reliefs and his Annual Exempt amount.
His next step is to work out which rates of tax to use.
For gains made on or before 22 June 2010, Capital Gains Tax is charged at a flat rate of 18 per cent. For gains on or after 23 June 2010, individuals need to work out their taxable income before working out which Capital Gains Tax rate applies. Follow the link below to see the rates to use and some examples.
Find out more about Capital Gains Tax rates
If you haven't received a tax return and have Capital Gains Tax to pay or wish to make a claim (for example for losses), you'll need to tell HMRC.
Find out more about tax returns and reporting a capital gain
What to do if you've made a loss
Is your asset liable to Capital Gains Tax?
See what records you need to keep for Capital Gains Tax
Download a guide to completing the Capital Gains Tax pages (PDF 207K)
