CG73640 - Dwellings subject to ATED: computation of gains and losses: chargeable interests held on 5 April of the relevant year: para 5 election applies - example
Basic information:
Residential property acquired April 2006 for 拢3,000,000 and disposed of April 2016 for 拢6,000,000. Election under paragraph 5 made
Estimated Indexation factor: April 2006 to April 2016 - 0.4
Total number of actual chargeable days and pre April 2013 ATED days 1,825
Total days 3,650
Stage 1
Disposal proceeds 拢6,000,000
Allowable deductions for CGT purposes 拢3,000,000
Gain 拢3,000,000
Stage 2
ctual and pre April 2013 ATED days (CD) 1,825
Total days 3,650
CD/TD x stage 1 gain ((1,825/3,650)) x 拢3,000,000) = 拢1,500,000
ATED related chargeable gain 拢1,500,000
Stage 3
Unadjusted gain from stage 1 拢3,000,000
ATED related gain 拢1,500,000
Notional indexation (see below) 拢600,000 拢2,100,000
Non ATED related gain 拢900,000
Notional indexation:
Indexation due on disposal
3,000,000 x 0.4 = 拢1,200,000
Apply factor (CD-TD)/TD
(3,650 - 1,825)/(3,650) x 拢1,200,000
Notional Indexation is 拢600,000