Use this UK shares calculator to work out your capital gain or loss, total dividend income, annualised return and any capital gains tax or dividend tax liability. Updated for 2026 CGT rates, the £3,000 annual exempt amount and the £500 dividend allowance.
When you sell shares outside an ISA and make a profit, you may owe Capital Gains Tax. Here is how it works in 2026:
| Tax Band | Annual Exempt Amount | CGT Rate on Shares |
|---|---|---|
| Basic rate taxpayer | £3,000 (2026) | 18% |
| Higher rate taxpayer | £3,000 (2026) | 24% |
| Additional rate taxpayer | £3,000 (2026) | 24% |
| Inside ISA | N/A | 0% (fully exempt) |
The CGT exempt amount applies to your total gains across all assets in the tax year, not just shares. If you also sell property, cryptocurrency or other assets in the same year, those gains all count towards the same £3,000 threshold.
Dividends received from shares held outside an ISA above the £500 annual allowance are subject to dividend tax. The rates are significantly lower than income tax rates but still represent a meaningful cost for higher earners with large shareholdings.
| Tax Band | Dividend Allowance | Tax Rate on Excess |
|---|---|---|
| Basic rate (income up to £50,270) | £500 | 8.75% |
| Higher rate (income £50,271–£125,140) | £500 | 33.75% |
| Additional rate (income over £125,140) | £500 | 39.35% |
| Inside ISA (any income level) | Unlimited | 0% |
When you buy UK-listed shares electronically you automatically pay Stamp Duty Reserve Tax (SDRT) of 0.5% on the purchase value. This is collected by your broker and passed to HMRC. For example, buying £5,000 of shares incurs £25 in SDRT.
SDRT applies only when buying, not selling. It applies to all purchases including those inside an ISA or SIPP. Shares in AIM-listed companies were exempt from SDRT until 2024, when the exemption was removed. Exchange Traded Funds (ETFs) that are listed overseas are generally exempt from SDRT even if they hold UK shares.
Every share has two prices: the bid price (what buyers will pay, the lower figure) and the ask price or offer price (what sellers want, the higher figure). When you buy shares you always pay the higher ask price. When you sell you receive the lower bid price.
The spread between these two prices is an implicit transaction cost that does not show up as a fee but still reduces your return. On large, liquid shares like FTSE 100 constituents the spread might be just 0.1–0.2%. On smaller AIM-listed shares it could be 2–5% or more. Always check the spread before trading, particularly for less liquid shares.
| Feature | Individual Shares | Index Fund | ETF |
|---|---|---|---|
| Diversification | Low (concentrated) | High (100s of stocks) | High (100s of stocks) |
| Typical annual cost | Dealing fees only | 0.1–0.5% | 0.05–0.3% |
| Research required | Significant | Minimal | Minimal |
| Potential return | Higher (and lower) | Market return | Market return |
| SDRT | 0.5% | Usually none | Usually none |
| Dividend frequency | Variable | Quarterly/half-yearly | Quarterly/half-yearly |
| ISA eligible | Yes | Yes | Yes |
| Best for | Active investors | Long-term passive | Flexible passive |
The annualised return (also called CAGR, Compound Annual Growth Rate) tells you what annual return is equivalent to your total return over multiple years. This allows fair comparison between investments held for different time periods.
The formula is: Annualised Return = ((Final Value ÷ Initial Cost) ^ (1 ÷ Years)) − 1
Example: You invested £2,500 in shares. After 3 years they are worth £3,800 and you also received £360 in total dividends. Your total final value is £4,160.
Your net return from share investing depends not just on price movements and dividends but also on the various costs involved:
In 2026, the annual CGT exempt amount is £3,000. Gains above this threshold are taxed at 18% for basic rate taxpayers and 24% for higher and additional rate taxpayers. Shares held within a Stocks & Shares ISA are completely exempt from CGT regardless of how large the gain is.
The dividend allowance in 2026 is £500. Dividends above this amount are taxed at 8.75% (basic rate), 33.75% (higher rate) or 39.35% (additional rate). Dividends received within a Stocks and Shares ISA are always tax-free and do not count towards the allowance.
Stamp Duty Reserve Tax (SDRT) of 0.5% is charged on electronic purchases of UK shares. It is automatically deducted by your broker at the point of purchase. You do not pay SDRT when selling shares. It applies even to purchases inside an ISA or SIPP. Some overseas-listed ETFs holding UK shares are exempt from SDRT.
Annualised return converts your total return into an equivalent annual rate. The formula is: ((End Value ÷ Start Value) ^ (1 ÷ Years)) − 1. For example, if you invested £5,000 and it grew to £8,000 over 5 years, your annualised return is (8000 ÷ 5000)^(1/5) − 1 = approximately 9.86% per year. Our calculator above does this automatically including dividends in the total return.
The bid-ask spread is the difference between the price buyers will pay (bid) and the price sellers are asking (ask). When you buy you pay the higher ask price; when you sell you receive the lower bid price. This spread is an implicit cost that reduces your net return. On large FTSE 100 shares the spread may be less than 0.2%, but on smaller AIM shares it can be 2–5% or more.
For most investors, broadly diversified low-cost index funds or ETFs outperform individual stock picking over the long term after costs. Individual shares offer the potential for higher returns but require significant research, carry concentrated risk and statistically the majority of individual shares underperform the index over 10+ years. Index funds deliver market-level returns at very low annual cost with built-in diversification.
A Stocks and Shares ISA completely shields all capital gains, dividends and interest from UK tax. There is no CGT when you sell shares inside an ISA, no dividend tax on income received, and no need to declare the gains on your self-assessment tax return. The 2026 annual ISA allowance is £20,000. This makes ISAs the most tax-efficient wrapper available for long-term share investing in the UK.