CG73628 - Dwellings subject to ATED: computation of gains and losses: chargeable interests held on 5 April of the relevant year - examples
1.Asset held on 5 April 2013 and always within the scope of ATED
2.Asset held on 5 April 2015 and not within the scope of ATED until 1 April 2015
3.Asset held on 5 April 2016 and not within scope of ATED until 1 April 2016
Example 1. Asset held on 5 April 2013 and always within the scope of ATED
Basic information:
Residential property acquired April 2006 for 拢3,000,000 and disposed of April 2016 for 拢6,000,000.
The property had a value of 拢5,000,000 at 5 April 2013.
Estimated Indexation factors are: April 2006 to April 2013 0.3
April 2006 to April 2016 0.4
Total number of days chargeable to ATED (say) 700
Total days 6/4/2013 to disposal 1095
Stage 1
Disposal proceeds 拢6,000,000
Market value at 5 April 2013 拢5,000,000
Notional post April 2013 gain 拢1,000,000
Stage 2
Days in relevant ownership period from April 2013 that are chargeable to ATED (CD) 700
Days in the relevant ownership period from 2013 to the date of disposal (TD) 1095
CD/TD x notional post April 2013 gain ((700/1095)) x 拢1,000,000) = 拢639,269
ATED related chargeable gain 拢639,269
on ATED-related gain before notional indexation (IA) (see stage 4) 拢360,731
Stage 3
Market value at 5 April 2013 拢5,000,000
Allowable costs 拢3,000,000
Indexation (3,000,000 x 0.3) 拢900,000 拢3,900,000
Notional pre April 2013 gain 拢1,100,000
Stage 4
Notional post April 2013 non ATED-related gain before IA (see stage 2) 拢360,731
Less notional IA (see below)
拢252,512
Notional indexation
Indexation due on disposal disregarding Schedule 4ZZA
3,000,000 x 0.4 拢1,200,000
Less
Indexation from stage 3 拢900,000
拢300,000
Apply factor (CD-TD)/TD
(1095-700)/(1095) x 拢300,000
Notional Indexation is 拢108,219
Stage 5
Stage 3 gain 拢1,100,000
Plus stage 4 gain 拢252,512
Non ATED-related gain 拢1,352,512
Example 2. Asset held on 5 April 2015 and not within the scope of ATED until 1 April 2015
Basic information:
Residential property acquired April 2010 for 拢800,000 and disposed of on 7 April 2016 for 拢1,400,000.
The property had a value of 拢1,200,000 at 5 April 2015.
Estimated Indexation factors are: April 2010 to april 2015 0.1
April 2010 to April 2016 0.11
Total number of days chargeable to ATED (assumed) 200
Total days 6 April 2015 to disposal (relevant ownership period) 365
Stage 1
Disposal proceeds 拢1,400,000
Market value at 5 April 2015 拢1,200,000
Notional post April 2015 gain 拢200,000
Stage 2
Days in relevant ownership period from April 2015 that are chargeable to ATED (CD) 200
Days in the relevant ownership period from 2015 to the day preceding the date of disposal (TD) 365
CD/TD x notional post April 2015 gain ((200/365)) x 拢200,000) = 拢109,589
ATED related chargeable gain 拢109,589
on ATED-related gain before notional indexation (IA) (see stage 4) 拢90,411
Stage 3
Market value at 5 April 2015 拢1,200,000
Allowable costs 拢800,000
Indexation (800,000 x 0.1) 拢80,000 拢880,000
Notional pre April 2015 gain 拢320,000
Stage 4
Notional post April 2015 non ATED-related gain before IA (see stage 2) 拢90,411
Less notional IA (see below) 拢3,617
拢86,794
Notional indexation
Indexation due on disposal disregarding Schedule 4ZZA
800,000 x 0.11 拢88,000
Less
Indexation from stage 3 拢80,000
拢8,000
Apply factor (CD-TD)/TD
(365-200)/(365) x 拢8,000
Notional Indexation is 拢3,617
Stage 5
Stage 3 gain 拢320,000
Plus stage 4 gain 拢86,794
Non ATED-related gain 拢406,794
Example 3. Asset held on 5 April 2016 and not within scope of ATED until 1 April 2016
Basic information:
Residential property acquired April 2010 for 拢300,000 and disposed of 7 April 2018 for 拢700,000.
The property had a value of 拢550,000 at 5 April 2016.
Estimated Indexation factors are: April 2010 to April 2016 0.11
April 2010 tp April 2018 0.13
Total number of days chargeable to ATED (assumed) 200
Total days 6 April 2016 to day preceding disposal 730
Stage 1
Disposal proceeds 拢700,000
Market value at 5 April 2016 拢550,000
Notional post April 2016 gain 拢150,000
Stage 2
Days in relevant ownership period from 6 April 2016 that are chargeable to ATED (CD) 200
Days in the relevant ownership period from 2016 to the day preceeding date of disposal (TD) 730
CD/TD x notional post April 2016 gain ((200/730)) x 拢150,000) = 拢41,095
ATED related chargeable gain 拢41,095
Non ATED-related gain before notional indexation (IA) (see stage 4) 拢108,905
Stage 3
Market value at 5 April 2016 拢550,000
Allowable costs 拢300,000
Indexation (300,000 x 0.11) 拢33,000 拢333,000
Notional pre April 2015 gain 拢217,00
Stage 4
Notional post April 2015 non ATED-related gain before IA (see stage 2) 拢108,905
Less notional IA (see below) 拢4,356
拢104,549
Notional indexation:
Indexation due on disposal disregarding Schedule 4ZZA
300,000 x 0.13 拢39,000
Less
Indexation from stage 3 拢33,000
拢6,000
Apply factor (CD-TD)/TD
(730-200)/(730) x 拢6,000
Notional Indexation is 拢4,356
Stage 5
Stage 3 gain 拢217,000
Plus stage 4 gain 拢104,549
Non ATED-related gain 拢321,549