How much is the Capital Gains Tax on shares?

Wondering how much the Capital Gains Tax on shares is? Let’s talk about CGT! 

Remind me, what is Capital Gains Tax?

Capital Gains Tax (CGT) is the tax you pay when you sell an asset for a profit. This could be property, digital currency or in this case… shares! 

How much Capital Gains Tax you pay when selling company shares or share options for a profit depends on a few things:

• How big the profit aka ‘taxable gain’ is 
• How you received them
• Who the shares came from

It might help to check out the CGT rates here!

I am selling shares from an ISA

Simple! There is no CGT tax to pay if your annual contributions to your ISA stayed within the £20,000 limit.

⚠️ If your ISA contributions go above the £20,000 annual limit, you won’t get any tax relief on the excess payments so be sure to keep an eye on this. ⚠️

I am selling shares that I bought through a broker or a general investment account (GIA)

In this case the calculation is straightforward as well:

• 0% Capital Gains Tax if your overall profit was under £12,300
• 10% if your overall annual income is under £50,270
• 20% if your overall annual income is over £50,270

Use our Capital Gains Tax calculator to work out how much you need to pay.

What if I am selling EIS, SEIS, or VCT shares?

• EIS and SEIS: There is no CGT to pay – but you would have to have held them for a minimum of 5 years
• VCTs: There is no CGT tax to pay and no holding time period 🥳

This is a key incentive when investing in EIS, SEIS or VCT companies. Read more about this topic in our guide to tax-efficient investments.

What if I am selling shares that I received from my employer?

This is where it can get slightly tricky. This all depends on your relationship to your employer. This table should help break it down for you:

Type of shares	How you received them	Capital Gains Tax
Your company’s common shares	You owned at least £2,000 worth of shares in your company	You only pay CGT on gains over £100,000 that you make during your lifetime
Your company’s common shares	You owned at least 5% of the company	You might qualify for Entrepreneurs’ Relief and pay CGT at a reduced rate of 10%
Your company’s common shares	Through a Share Incentive Plan (SIP)	—
You or other companies’ publicly listed shares	Through a Save As You Earn (SAYE) plan	—
Your company’s share options	Through a Share Option Plan	Normal rate (on the difference between the exercise price and what you sold them for)
Your company’s share options	Through an Enterprise Management Incentive Plan (EMI)	Normal rate (on the difference between the exercise price and what you sold them for)

And what if I am selling shares that I received as a gift?

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. 

But if the person giving you the shares was your husband, wife or civil partner, then you don’t need to pay any Capital Gains Tax.

What if I made a loss?

If you made a capital loss when selling shares, you have two options. If your total taxable gain is still above the tax-free allowance, you can:

• Deduct unused losses from previous tax years

On the other hand, if they reduce your gain to the tax-free allowance, you can:

• Carry forward the remaining losses to a future tax year

Still a bit confused?

It can be a lot to wrap your head around at once. Seeking professional advice is always a good option! And our accredited accounts can provide just that – find out more here.