Topics

Calculation of capital gains adjustments

This update outlines changes to Capital Gains Tax rates effective from October 2024 and explains how adjustments are calculated and applied.
The following changes have been made to DPT 25.1 for Individuals, Trustees, and Personal Representatives who pay Capital Gains Tax:
  • The main rates of Capital Gains Tax that apply to assets other than residential property and carried interest from 10% and 20% to 18% and 24% respectively, for disposals made on or after 30 October 2024.
  • The rate of Capital Gains Tax that applies to trustees and personal representatives from 20% to 24% for disposals made on or after 30 October 2024.
  • Capital Gains Tax rates for Business Asset Disposal Relief and Investors' Relief will increase from 10% to 14% beginning 6 April 2025, then to 18% from 6 April 2026 (tax years 25/26 and 26/27).
  • The rates of Capital Gains Tax that apply to residential property disposals (18% and 24%) remain unchanged.
  • More information is available in the Capital Gains Tax — rates of tax policy paper.

How the adjustment works

If your client has an adjustment in the computation, they likely sold an asset on or after 30 October 30 2024. HMRC wants the pre-change rate used in the main calculation, so the adjustment gets calculated separately and appears on line 51 of the CGT pages.
If any changes to the amount are needed, the auto-calculated amount can be manually replaced in
Other return information schedule
Form options
. Use either the
Adjustments to Capital Gains – Tax Returns
 or
Adjustment to Capital Gains – Tax Computation
 fields.
note
The adjustment for CGT is automatically calculated from version 25.1 of Personal Tax.

Example calculation

Scenario
  • A client sold shares in 2 parts thorough 24/25 tax year. 1 disposal took place on May 31, 2024, and the 2nd on November 1, 2024.
  • Each of these disposals created a gain of 15,000. Only the 2nd will trigger an adjustment.
  • Client also received 81,000 of income from employment.
How to calculate
  1. Find when the disposal happens and the type of asset sold:
    1. If the disposal happened after 30 October 2024, no adjustment will calculate.
    2. No adjustment will be calculated for residential property or carried interest disposals made before 30 October 2024.
    3. An adjustment will be calculated for non-residential property and non-carried interest disposals made before 30 October 2024.
  2. Deduct annual exemption from the gain taxed at the higher rate (that is, the gain after the rate change), so: 15,000 – 3,000 = 12,000. Current or brought-forward losses may be deducted to maximize client benefit.
  3. Calculate the tax on the gain after the rate change with an old rate: 12,000 x 20% = 2,400.
  4. Calculate tax on the same gain with a new rate: 12,000 x 24% = 2,880.
  5. Deduct the smaller amount from the larger one: 2,880 - 2,400 = 480. £480 is the adjustment that will appear in the summary of the computation.
If any changes to the amount are needed, the auto-calculated amount can be manually replaced in
Other return information schedule
Form options
. Use either the
Adjustments to Capital Gains – Tax Returns
 or
Adjustment to Capital Gains – Tax Computation
 fields.

This article applies to:

  • PRODUCT: Digita Personal Business and Trust Tax