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Posted Sun, 26 Nov 2023 09:11:59 GMT by rrjmaier
Hello, I am holding various shares since over 15 years and I am considering selling these in the near future (the next 2 years or so). My Capital Gain will be in the order of £15 - 20k. I am a higher rate tax payer. Let's assume the tax free threshold will be £3000 in TY 24-25 as announced previously. How is the CG tax calculated? The majority of the gains in the value of the shares were realized in the early years of the investment with only marginal gains or minor loses in the later years. Are the tax free thresholds applied successively for past years (see example A below) or simply applied at the current rate when the gain is realised i.e. the shares are sold (example B). For example Shares bought in 2015 cost 50k, 2017 value 65k, 2019 value 80k, 2024 assumed value 100k: selling 2024: total gain 50k over 9 years. A) Total gains 50K over 9 years = 5.1k per annum on average, for 2015 to TY 23-24 tax free threshold was greater than the gain per annum hence no tax to pay for these years and only in 2024-25 is the tax free threshold (£3k) below the gain, hence: £5.1k gain p.a. minus £3K threshold = thus tax to be paid on 2.1k at the higher rate (approx £420). B) CG Threshold in TY24-25 assumed to be 3k : hence 50k gain in total over 9 years minus 3k tax free = 47k are taxable at the higher rate (approx £9.4k)? Thanks for the clarification
Posted Tue, 28 Nov 2023 13:29:10 GMT by HMRC Admin 8
Detailed guidance on calculating Capital Gains on the sale of shares (including HMRC's 'Capital Gains Calculator') is provided here:    
Tax when you sell shares
Thank you

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