You’ll need to work out your gain to find out whether you need to pay Capital Gains Tax. Your gain is usually the difference between what you paid for your shares and what you sold them for. Market value In some situations you should use the market value of the shares when working out your gain. Do this if: you gave them away as a gift to someone other than your spouse, civil partner or a charity you sold them for less than they were worth you inherited them and do not know the Inheritance Tax value you owned them before April 1982 you acquired them through certain Employee Share Schemes If the shares were given or sold to you by someone who claimed Gift Hold-Over Relief , use the amount that person paid for them to work out your gain. If you paid less than they were worth, use the amount you paid for them. Selling in special circumstances There are special rules for working out the cost of your shares if you sell: shares you bought at different times and prices in one company shares through an investment club shares after a company merger or takeover employee share scheme shares Jointly owned shares and investments If you sell shares or investments that you own jointly with other people, work out the gain for the portion that you own, instead of the whole value. There are different rules for investment clubs . What to do next Deduct costs You can deduct certain costs of buying or selling your shares from your gain. These include: fees, for example stockbrokers’ fees Stamp Duty Reserve Tax ( SDRT ) when you bought the shares Contact HM Revenue and Customs ( HMRC ) if you’re not sure whether you can deduct a certain cost. Apply reliefs You may be able to reduce or delay paying Capital Gains Tax if you’re eligible for tax relief . Work out if you need to pay When you know your gain you need to work out if you need to report and pay Capital Gains Tax. You may be able to work out how much tax to pay on your shares. You can use the calculator if you sold shares that were: the same type, acquired in the same company on the same date sold at the same time You can not use the calculator if you: sold other shares in the tax year sold other chargeable assets in the tax year, such as a property you let out claim any reliefs are a company, agent, trustee or personal representative Calculate Capital Gains Tax Reporting a loss The rules are different if you need to report a loss . You can claim losses on shares you own if they become worthless or of ‘negligible value’ (for example because the company goes into liquidation). HMRC has guidance on making a negligible value claim .

Selling shares in the same company

There’s a different way of working out your cost if you’ve sold the same type of shares in a company that you bought at different times. You’ll usually need to work out the average cost of your shares and deduct this from what you got for them to work out your gain . Example You buy 100 shares for 80p each. The total cost is £80. You later buy 300 shares for £1.20 each. The total cost is £360. In total, you have 400 shares costing £440 - the average cost of each share is £1.10. If you sell 150 shares, the cost of the shares for your tax calculations is £165 (£1.10 multiplied by 150). Deduct this from what you sold the shares for to work out your gain. If you bought new shares of the same type in the same company within 30 days of selling your old ones, there are special rules for working out the cost to use in your tax calculations. Contact HM Revenue and Customs ( HMRC ) or get professional tax help if you need advice.

You work out your gain differently if you’ve bought and sold shares through an investment club. An investment club is a group of people that buys and sells shares together on the stock market. Work out your gain You’ll get a written statement of your gains and losses (an ‘ investment club certificate (PDF, 212KB) ’) at the end of each tax year from the person who runs the club, for example its treasurer. When you know your gain, work out if you need to report and pay Capital Gains Tax. There are special rules if you make any losses . Leaving an investment club The club buys back your shares if you leave, and you need to include any gain or loss when you’re working out if you need to pay tax. Take your share of any gains during your membership of the club, and deduct your share of any losses. Add any income from dividends you received ( after tax ). Add any other money you received from the club, and deduct anything you paid into it (for example a monthly amount to invest). Deduct the total from what you received from the club for your shares. Contact HM Revenue and Customs ( HMRC ) or get professional help (for example from an accountant) if you need advice. Transferring shares into the club If you transfer shares you already own into the club, you’re treated as selling them and you need to work out your gain . If you run an investment club The investment club treasurer or secretary should: divide any income, gains and losses between its members according to the club’s rules give every member a written statement at the end of each tax year - you can use HMRC ’s investment club certificate (PDF, 212KB) keep records including members’ income and gains arrange to buy shares from members who want to leave the club If you’re starting a new investment club, make sure it has a constitution and rules. Get legal advice from a professional if you need help.

You may be able to reduce or delay the amount of Capital Gains Tax you have to pay if you’re eligible for tax relief. Relief Description Business Asset Disposal Relief Pay 10% Capital Gains Tax instead of the normal rates if you sell shares in a trading company that you work for and have at least 5% of the shares and voting rights (known as a ‘personal company’). Gift Hold-Over Relief Pay no Capital Gains Tax if you give away shares in a personal company or unlisted company - the person you gave them to pays tax when they sell them. Enterprise Investment Scheme ( EIS ) Delay or reduce your Capital Gains Tax if you use a gain to buy unlisted shares in companies approved for EIS . Seed Enterprise Investment Scheme ( SEIS ) Pay no Capital Gains Tax on a gain of up to £100,000 if you use a gain to buy new shares in small early-stage companies approved for SEIS . Rollover relief Delay paying Capital Gains Tax if you sell unlisted shares to the trustees of a Share Incentive Plan ( SIP ) and use the proceeds to buy new assets. Shares are ‘unlisted’ if they’re in a company that is not listed on the London Stock Exchange or a recognised stock exchange abroad.

Tax when you sell shares

What you pay it on

You may have to pay Capital Gains Tax if you make a profit (‘gain’) when you sell (or ‘dispose of’) shares or other investments.

Shares and investments you may need to pay tax on include:

shares that are not in an ISA or PEP
units in a unit trust
certain bonds (not including Premium Bonds and Qualifying Corporate Bonds)

You’ll need to work out your gain to find out whether you need to pay tax. This will depend on if your total gains are above your Capital Gains Tax allowance for the tax year.

If you’re selling shares belonging to the estate of someone who’s died, you’ll need to include this information when reporting the estate to HMRC.

When you do not pay it

You do not usually need to pay tax if you give shares as a gift to your husband, wife, civil partner or a charity.

You also do not pay Capital Gains Tax when you dispose of:

shares you’ve put into an ISA or PEP
shares in employer Share Incentive Plans (SIPs)
UK government gilts (including Premium Bonds)
Qualifying Corporate Bonds
employee shareholder shares - depending on when you got them

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