Tax due

Taxable gain
Indexed purchase cost
Net proceeds after tax
Tax as a share of the raw gain

How it works

The gain is the sale proceeds less what you paid and less the costs of acquiring, improving and selling. Brokerage, stamp duty and legal fees all reduce the gain, and they are routinely forgotten by people estimating the tax in their heads.

Where a jurisdiction offers indexation, the purchase cost is uplifted for inflation over the holding period before the gain is computed — which can cut the taxable amount dramatically on a long-held asset. Both the rate and the exemption are inputs, so the tool fits whichever regime applies to you.

Gain = proceeds − costs − indexed cost · Tax = max(0, gain − exemption) × rate

  • Indexed cost — purchase price uplifted for inflation, where the regime allows it
  • Exemption — the annual tax-free allowance on gains, if any
  • Net proceeds — sale price less selling costs and tax

Worked example

Bought for 800,000, sold for 1,600,000 eight years later, 5% inflation indexation, 20% tax

Inputs

Purchase800,000
Sale1,600,000
Held8 years
Costs45,000
Rate20%

Results

Tax due74,607
Taxable gain373,036
Net proceeds1,480,393

Without indexation the taxable gain would be 755,000 and the tax 151,000 — indexation halves the bill on an eight-year hold.

Frequently asked questions

What is indexation?

An adjustment that raises your purchase cost in line with inflation before the gain is calculated, so you are not taxed on growth that merely kept pace with prices. Not every country offers it, and many restrict it to particular asset classes — set the inflation rate to zero if it does not apply to you.

Which costs can I deduct?

Generally the costs of buying, selling and improving the asset: brokerage, stamp duty, legal and registration fees, and capital improvements. Ordinary maintenance and running costs usually cannot be deducted.

Why does the holding period matter?

Most systems tax short-term gains at a higher rate than long-term ones, and the boundary is often one, two or three years. Enter whichever rate applies to your holding period — the calculator does not decide that for you.

Can I offset a loss?

Usually yes, against other gains, and often carried forward to future years. This calculator handles a single disposal, so a negative gain simply produces zero tax rather than a refund.

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