The short version: A capital gain is the profit you make when you sell something for more than you paid for it. Could be a property, shares, cryptocurrency, a piece of art, or a vintage car.
The maths is simple. Take what you sold it for, subtract what you paid. If there’s profit left over, that’s your capital gain. And yes, you might have to pay tax on it.
Do I have to pay tax on every gain?
Not necessarily. There’s a tax free allowance each year. You only pay Capital Gains Tax on profits above that threshold. Check gov.uk for the current allowance as it does change.
Your main home is usually exempt too. So selling the house you live in won’t trigger CGT.
And if you sell something for less than you bought it? That’s a capital loss. You can use losses to reduce gains you’ve made elsewhere and bring down your tax bill.
Made a profit on something and want to know where you stand? Let’s work it out together.
