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Fees and exchange rates

Before any share-matching happens, every trade's cost is adjusted for two things: dealing fees (which change the cost or proceeds) and exchange rates (which convert everything to GBP). This guide explains how each works and which fees HMRC lets you include.

Dealing fees (allowable expenditure)

When you buy or sell shares, you typically pay a fee to the broker. HMRC calls these allowable expenditure — and they reduce your taxable gain because they're a genuine cost of acquiring or disposing of the asset.

How fees are applied

  • On a buy: fees are added to the purchase cost. If you buy 100 shares at £10.00 with a £12.00 fee, your cost basis is £1,012.00 — not £1,000.
  • On a sell: fees are subtracted from the proceeds. If you sell 100 shares at £15.00 with a £12.00 fee, your proceeds are £1,488.00 — not £1,500.

Either way, fees shrink the gap between cost and proceeds, so they reduce your gain (or increase your loss).

What counts as an allowable fee

  • Broker commission or dealing charge per trade.
  • Stamp Duty Reserve Tax (SDRT) — the 0.5% tax on UK share purchases.
  • PTM levy (the small panel-on-takeovers charge, if applicable).
  • Fees charged by the platform specifically to execute the trade.

What does NOT count

Platform subscription fees (monthly account charges), custody fees, and research/data fees are not allowable — they're general investment costs, not costs of a specific acquisition or disposal. Only fees directly tied to a particular buy or sell qualify.

Exchange rates

UK Capital Gains Tax is calculated entirely in GBP. If you trade in another currency (USD, EUR, etc.), every trade must be converted to pounds. HMRC accepts either the spot rate on the day of the trade or HMRC's own published monthly average rate for the month the trade took place — whichever you use, be consistent and use the same approach across all your trades.

How FX conversion works

Each trade is converted once, at the time it enters the calculation. The rate used is how many units of the foreign currency equal one pound (e.g. if £1.00 = $1.27, the rate is 1.27). The trade's cost or proceeds in GBP is simply:

GBP value = (quantity × price in foreign currency) ÷ exchange rate

Fees in a foreign currency are converted the same way, at the same rate.

Where to find the exchange rate

HMRC publishes official monthly exchange rates (the calculator can look these up for you). Alternatively, your broker statement usually shows the spot rate used on each trade. The calculator accepts the rate per trade — use whatever your broker reported, or HMRC's published rate for that month.

What if I just want to enter GBP figures?

If you've already done the FX conversion yourself (or your broker reports everything in GBP), you can simply enter the GBP amounts with the exchange rate set to 1.00 and fees set to 0. The calculator will use the figures exactly as entered — the conversion and fee logic only changes the numbers when you give it non-default values.

Similarly, if you want to handle fees separately (for example, including SDRT in the unit price you enter), just leave the fees field at 0 and the calculator will work with your all-in figure.

Why this step comes first

Fees and FX conversion are applied before any matching happens. That means by the time the merging and matching rules run, every trade is already a clean GBP figure with fees baked in. The pool's average cost, the same-day match cost, and the bed & breakfast cost all already include the fees — there's no separate step later.

Next: how same-day trades are merged, or back to getting started with CGT.

Sources

The rules and figures in this guide come from HMRC and GOV.UK. This site is independent and not affiliated with HMRC.