188体育

Top of page

2.2 The calculation

2.2.1 Initial gain or loss

2.2.2 Gain or loss after reliefs

2.2.3 Overall gain

2.2.4 CGT due for this return

2.2.5 Computation - Legislation

听

2.2 The calculation

This section of the guidance sets out how the CGT on UK Property Account in-built calculator computes the CGT notionally chargeable when the CGT on UK Property Account is used to file a return.

The amount of CGT notionally chargeable on a person as at the filing date for a return is determined in accordance with para 7, Schedule 2 Finance Act 2019.

The example in this section, demonstrates most of the figures the return can use as part of the in-built computation. The information provided into the return is used in a straightforward calculation.

For scenarios where the details captured by the system are not sufficient to calculate the correct amount of CGT due, the user can enter the correct amount, along with their own supporting calculation. This is covered in the section .

The calculation output within the system, is broken down into four subheadings each of which can be expanded within the account so the workings can be seen, the four headings are:

• Initial gain or loss
• Gain or loss after reliefs
• Overall gain
• CGT due for this return.

The CGT rates and Annual Exempt Amount (AEA) for current and previous years are published on 188体育.

2.2.1 Initial gain or loss

Example: A UK resident person is required to complete a return through the CGT on UK Property Account. The person has sold a residential property of which they had owned 100%. The property sold for 拢400,000, and the total solicitor and estate agent fees for the disposal were 拢5,800. The contract exchange occurred on 30 June 2024 and the completion date was 30 July 2024.

Property disposal amount 听听听听听听	拢400,000
Disposal costs 听听听听	-拢5,800
Property disposal amount less costs 听	拢394,200

The person had acquired the property for 拢210,000 and had incurred solicitor fees, surveyor fees and SDLT totalling 拢3,100. They spent 拢28,000 on an extension improving the property.

Property acquisition amount 听听	听拢210,000
Improvement costs 听听	+拢28,000
Acquisition costs	+拢3,100
Property Acquisition amount plus costs	拢241,100
Disposal amount less costs (i)	拢394,200
Property acquisition amount plus costs (ii)	-拢241,100
Initial gain or loss	拢153,100

Back to top of page

2.2.2 Gain or loss after reliefs

Example continued: The person had also made a disposal of some shares they owned, earlier in the tax year on 14 May 2024. This disposal had resulted in a loss of 拢4,500. As the loss occurred prior to the completion date for the property disposal being reported, they can reduce the CGT that will be notionally chargeable by including it in the calculation. For more guidance on which in year losses can be used in the property disposal CGT calculation, see section 2.5 in the guidance. (If the share disposal had resulted in a gain it would not need to be included in the computation).听

For this example, it is assumed that the person wants to use all of their Annual Exempt Amount (AEA), for 2024-25 this is 拢3,000, against the residential property gain. The Annual Exempt Amount, an annual tax-free amount of capital gains, is not to be confused with an individual鈥檚 Personal Allowance, which is their tax free amount for income.

Private Residence Relief	拢76,550
Letting relief听听听	0
Other reliefs 听	0
Total reliefs 听	拢76,550

Initial gain or loss听听听听	拢153,100
Total reliefs	- 拢76,550
Gain or loss after reliefs听	拢76,550

The and the is calculated using the information entered in the section of the return, see 2.4.

听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听听

2.2.3 Overall gain

Example continued: The person had also made a disposal of some shares they owned, earlier in the tax year on 14 May 2021. This disposal had resulted in a loss of 拢4,500. As the loss occurred prior to the completion date for the property disposal being reported, they can reduce the CGT that will be notionally chargeable by including it in the calculation. For more guidance on which in year losses can be used in the property disposal CGT calculation, see section 2.5 in the guidance. (If the share disposal had resulted in a gain it would not need to be included in the computation).听

For this example, it is assumed that the person wants to use all of their Annual Exempt Amount (AEA), for 2021-22 this is 拢12,300, against the residential property gain. The Annual Exempt Amount, an annual tax-free amount of capital gains, is not to be confused with an individual鈥檚 Personal Allowance, which is their tax free amount for income.

Gain or loss after reliefs听	拢76,550
Losses from this tax year	- 拢4,500
Gain after losses from this tax year	= 拢72,050
Gain after in year losses 听听听	听拢72,050
Amount of Annual Exempt Amount used	- 拢3000
Year position 听听	拢69,050

Example continued: The person also made an allowable loss of 拢7,560 in the 2023-24 tax year which was available to carry forward to the 2024-25 tax year, as it was not used in 2023-24.

Year position 听听	听拢69,050
Losses from previous tax years 听	- 拢7,560
Overall gain	=拢61,490

2.2.4 CGT due for this return

A person鈥檚 level of income affects their Income Tax rate, which in turn affects their CGT rate. Further detail is provided on how the figures of expected annual income are required for the CGT calculation in section 2.5.2.

Example continued: This person has an expected annual income of 拢36,600 and a Personal Allowance of 拢12,570 for 2024-25. From these figures, which are entered in the report and pay section of the return (see 2.5.1) the amount of the gain chargeable at the lower rate of 18% is calculated, and the remainder of the gain is chargeable at 24%

Gross annual income听听听听听听听听	拢36,600
Amount of Personal Allowance used 听	-听 拢12,570
Taxable income 听听	=听 拢24,030

UK threshold for basic rate tax听听听	拢37,700
Taxable income 听听听听听	- 拢24,030
UK threshold for basic rate tax less taxable income	= 拢13,670

To work out the amount to be charged at the basic rate of CGT we took the lower of these amounts:

UK threshold for basic rate tax less taxable income听听听听听	拢13,670
Overall gain听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 听 OR	拢61,490
Amount of the overall gain to be taxed at basic rate (18%)	= 拢13,670

Overall gain听听听听听听听	拢61,490
Amount of the overall gain to be taxed at basic rate 听听听	- 拢13,670
Amount of the overall gain to be taxed at higher rate (24%)	= 拢47,820
听	听
Amount of the overall gain to be charged at the basic rate	拢13,670
basic rate 听听听听听	X听18%
Amount of tax due at the basic rate听	= 拢2,460.60
Amount of the overall gain to be charged at the higher rate听	拢47,820
Higher rate 听听听听听听听听听	X 24%
Amount of tax due at the higher rate听听听	= 拢11,476.80
听	听
Amount of tax due at the basic rate听听	拢2,460.60
Amount of tax due at the higher rate听听	+ 拢11,476.80
CGT due for this return. 听听听	=听 拢13,937.40

This example is continued further to demonstrate the calculation where multiple returns are made in a year in section 2.5.9.

2.2.5 Computation - Legislation

The legislation in Schedule 2 Finance Act 2019 sets out the provisions for making returns in respect of disposals of UK land.听

The legislation sets out what CGT is notionally chargeable in year, the amount chargeable when filing a return through the CGT on UK Property Account as opposed to the full amount of CGT chargeable for the Tax Year or the full amount of Capital Gains on disposals up to that point in the year.

For UK residents the amount of CGT notionally chargeable at the filing date is, the amount the person would be liable for the tax year concerned, ignoring disposals occurring after the completion date or which aren鈥檛 direct disposals of UK land on which a residential property gain accrues (see Para 1, Schedule 2 Finance Act 2019).

Para 7 (see extract below) sets out that the amount notionally chargeable is the amount of CGT the person would be liable for the tax year, excluding disposals occurring after the completion date of the disposal being returned and excluding gains on disposals of things not covered by the Schedule.

Calculation of an amount of CGT notionally chargeable

7

(1)听听听听 This paragraph applies for determining the amount of CGT (if any) which is notionally chargeable on a person as at the filing date for a return.

(2)听听听听 The amount of CGT notionally chargeable on the person as at that date is the amount of that tax for which the person would be liable for the tax year concerned, ignoring, for this purpose, the following disposals鈥�

(a)听听听听 disposals which have a completion date later than the completion date of the disposal in respect of which the return is made (but see sub-paragraph (3)), and

(b)听听听听 disposals on which gains accrue but which are not disposals to which this Schedule applies.

(3)听听听听 A disposal on which a loss accrues is not to be ignored under sub-paragraph (2)(a) if the time at which the disposal is made (as determined under听听of TCGA 1992) falls on or before the completion date of the disposal in respect of which the return is made.

(4)听听听听 For provision relevant to the operation of this paragraph, see paragraphs 14 and 15 (making of assumptions, reasonable estimates etc).

covered by Para 14 and 15 is at section 2.5.3 of this guidance.

Back to top of page