Understanding capital gains and the annual exemption

Proceeds minus allowable cost gives the gain

Proceeds are what you receive for a disposal. Gainly deducts sell-side fees from proceeds and includes buy-side fees in allowable cost. The matching rules determine which acquisition costs belong to the units sold.

If proceeds exceed allowable cost, there is a gain. If allowable cost is higher, there is a loss. Neither figure is the investment’s current value or a live profit-and-loss estimate.

Example: tracing fees through a sale

You buy 20 shares at £10 each with a £4 purchase fee, then sell all 20 at £15 each with a £6 sale fee. Assume no competing same-day or 30-day acquisitions and no other transactions.

Acquisition cost

(20 × £10) + £4 = £204

Net sale proceeds

(20 × £15) − £6 = £294

Capital gain

£294 − £204 = £90

The exemption applies to the tax year

The Annual Exempt Amount is an annual tax-free allowance for gains. It is not a fresh allowance for each trade, asset or account. Use the allowance for the relevant disposal year when reviewing historical figures.

Gainly groups disposals by the sell date in UTC. Its UK tax years run from 6 April to the following 5 April. A purchase used by the 30-day rule can be in a later year without changing the sale’s tax year.

Example: from gains to taxable gain

For a simplified 2025–26 example, assume an individual eligible for the full £3,000 annual exemption has £4,200 of gains and £700 of allowable losses in that year, with no other gains, reliefs or brought-forward losses.

Net gains

£4,200 − £700 = £3,500

Annual exemption for 2025–26

£3,000

Taxable gain

£3,500 − £3,000 = £500

Check losses and investments outside Gainly

HMRC has rules for reporting allowable losses and using losses from earlier years. Brought-forward losses are not simply treated like losses of the current year. Check your wider records and the official guidance before finalising a return.

Gainly’s summary reflects the trades you have recorded. Other chargeable assets, unrecorded transactions, claims and reliefs can affect your overall position. A below-exemption result in the app is not, by itself, confirmation that you have nothing to report.

A taxable gain is not a tax bill

The £500 in the example is the part of the gain left after the exemption. It is not £500 of tax payable. Gainly stops at taxable gain: it does not apply tax rates, determine tax due or submit your return.

Use the figures as working papers to review alongside your complete records. Home’s year control changes your CGT position, while Holdings continues to show current pooled costs. Simulate models a possible sale against this tax year only.