Error: CGT adjustment calculation in connection with clogged losses may be incorrect
Scenario
This issue relates to the post October CGT calculation for the rate change when there are Connected Losses involved.
Cause
The software determines the adjustment by calculating the tax due at the old rates (10% and 20%), then calculating the tax due at the new rates (18% and 24%) and then deducting one from the other.
The old rate calculation is including any reduction due to connected losses being utilised, but the calculation at the new rates doesn't, which results in the software overstating the size of the adjustment.
Solution
We have introduced a tax aware in 25.2 that shows when there is a post 30th October disposal and connect losses are utilised.
The workaround is to overwrite values in Other Return Information for Individuals, reducing the adjustment by the required amount.
For trust cases it will require manual editing of the tax return entries. If any help is needed with this process, contact Support.