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.

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 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

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 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.

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Last updated: 6 October 2016

Tax when you sell shares