Capital Gains Tax Calculator

Estimate your capital gains tax liability for the US or UK. Enter your purchase and sale prices, holding period, and income to see your applicable tax rate and estimated tax owed.

Understanding Capital Gains Tax

Capital gains tax is levied on the profit you make when selling an asset for more than you paid for it. The tax applies to stocks, bonds, property, cryptocurrency, and other investments. The rate you pay depends on your country, how long you held the asset, and your overall income level.

Understanding how capital gains tax works is essential for investment planning. The difference between short-term and long-term rates can be substantial — in the US, the gap can be as large as 17 percentage points. Timing your sales strategically can save thousands in tax.

US Capital Gains Tax Rules

In the United States, capital gains are classified as either short-term or long-term based on how long you held the asset before selling. The dividing line is 12 months.

Short-term capital gains (assets held less than 12 months) are taxed as ordinary income. For 2024, federal rates range from 10% to 37% depending on your total taxable income. This means a short-term gain could be taxed at the same rate as your salary.

Long-term capital gains (assets held 12 months or more) benefit from preferential rates of 0%, 15%, or 20%. Most taxpayers fall into the 15% bracket. The 0% rate applies to individuals with taxable income below $47,025 (2024, single filer), while the 20% rate kicks in above $518,900.

High earners may also owe the 3.8% Net Investment Income Tax (NIIT) on top of the capital gains rate, bringing the effective maximum to 23.8%. State taxes can add further to the total bill.

UK Capital Gains Tax Rules

In the UK, capital gains tax works differently. There is no distinction between short-term and long-term holding periods for most assets. Instead, the rate depends on your income tax band and the type of asset.

For the 2024/25 tax year, the annual exempt amount is £3,000. You only pay tax on gains above this threshold. Basic rate taxpayers pay 10% on gains from shares and securities, while higher and additional rate taxpayers pay 20%.

If your taxable income plus your capital gain crosses the basic rate threshold (£50,270 for 2024/25), the portion of the gain within the basic rate band is taxed at 10% and the remainder at 20%. This calculator models this split automatically based on the taxable income you enter.

Why Holding Period Matters

In the US, the difference between holding an asset for 11 months versus 13 months can change your tax rate from 37% to 15% — a dramatic reduction. This makes the holding period one of the most powerful tax planning tools available to investors.

Tax-loss harvesting is another strategy worth understanding. If you have realised gains in a tax year, you can sell losing positions to offset those gains and reduce your tax bill. In the US, up to $3,000 of net capital losses can be deducted against ordinary income each year, with excess losses carried forward indefinitely.

For a broader view of your trade profitability before tax, use our Stock Profit Calculator. To plan your long-term retirement savings strategy, explore the Retirement Calculator.