Tax when you sell shares
2. Work out your gain
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.
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 don’t 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
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.
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 use the Capital Gains Tax calculator to work out how much tax you might need to pay. You can use the calculator if:
- you sold all your shares in one company at the same time
- the shares you sold were all the same type
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.