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.

Market value

In some situations you should use the market value of the shares when working out your gain. Do this if:

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:

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 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.