CG73634 - Dwellings subject to ATED: computation of gains and losses: chargeable interests acquired after 5 April of the relevant year - examples

1.Acquisition in April 2014 for 拢4,000,000

2.Acquisition in October 2015 for 拢1,500,000

1.Acquisition in April 2014 for 拢4,000,000

Basic information:

Residential property acquired April 2014 for 拢4,000,000 and disposed of April 2018 for 拢6,000,000.

Estimated Indexation factor Year
0.25 April 2014 to April 2018
Total number of days chargeable to ATED 730
Total days April 2014 to April 2018 1,460

Stage 1

Disposal proceeds Amount
- 拢6,000,000
Allowable deductions for CGT purposes 拢4,000,000
Gain on CGT rules 拢2,000,000

Stage 2

Days in period of ownership that are chargeable to ATED (CD) 730

Total days (TD) 1,460

CD/TD x gain on CGT rules ((730/1,460) x 拢2,000,000) = 拢1,000,000

ATED-related chargeable gain 拢1,000,000

Stage 3

Not required - gain under stage 2

Stage 4

Unadjusted gain from stage 1 above 拢2,000,000

Less

ATED related gain 拢1,000,000

Notional indexation (see below) 拢500,000 拢1,500,000

拢500,000

Non ATED-related gain 拢500,000

Notional indexation:

Maximum indexation (拢4,000,000 x 0.25) = 拢1,000,000

Relevant fraction: ((TD - CD) / TD) x indexation

((1460 - 730) / 1460) x 拢1,000,000) = 拢500,000

2.Acquisition in October 2015 for 拢1,500,000

Basic information:

Residential property acquired October 2015 for 拢1,500,000 and disposed of April 2018 for 拢2,500,000.

Estimated Indexation factor Year
0.20 October 2015 to April 2018
Total number of days chargeable to ATED 730
Total days October 2015 to April 2018 913

Stage 1

Disposal proceeds 拢2,500,000

Allowable deductions for CGT purposes 拢1,500,000

Gain on CGT rules 拢1,000,000

Stage 2

Days in period of ownership that are chargeable to ATED (CD) 730

Total days (TD) 913

CD/TD x gain on CGT rules ((730/913) x 拢1,000,000) = 拢799,562

ATED-related chargable gain 拢799,562

Stage 3

Not required 鈥� gain under stage 2

Stage 4

Unadjusted gain from stage 1 above 拢1,000,000

Less

ATED realated gain 拢799,562

Notional indexation (see below) 拢60,131 拢859,693

拢140,307

Non ATED-related gain 拢140,307

Notional indexation:

Maximum indexation (拢1,500,000 x 0.20) = 拢300,000

Relevant fraction: ((TD 鈥� CD) / TD) x indexation

((913 鈥� 730) / 913 x 拢300,000) = 拢60,131