CGT rates

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A client's 22-23 income is below the personal allowance.

They have £60k gains after the annual exemption on residential property and £200k gains eligible for the 10% rate (BADR).

Does anyone know why all the residential property gains are taxable at 28%? The client has paid CGT at 18%/28%.

I can't follow the rules under "If you pay basic rate income tax" here: https://www.gov.uk/capital-gains-tax/rates

Thanks

Replies (6)

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By richard thomas
24th Oct 2023 20:23

Section 1I(2) TCGA?

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By David Ex
24th Oct 2023 20:26

To be fair, that’s the Micky Mouse “guidance”. You need to look at HMRC manuals and the legislation.

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg10245

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By Matrix
24th Oct 2023 20:42

Thanks so the residential gains are wholly taxed at 28% since the unused basic rate band is allocated against the BADR gain first?

So you can choose how to allocate the annual exemption but not the unused BRB.

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Replying to Matrix:
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By Tax Dragon
24th Oct 2023 22:06

It's more a restriction on BADR than BRB. Read the rest of s1I (I think Richard may have peaked too early with ss2).

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Replying to Matrix:
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By richard thomas
25th Oct 2023 10:17

Yes. And I agree I omitted "ff" after "s 1I(2)" or I should have omitted "(2)", but at least I pointed to the right place.

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Replying to richard thomas:
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By Matrix
25th Oct 2023 12:10

Thanks that was really helpful and I found the answer in the rest of the section. I have included the legislative reference in my email to my client since the family accountants who did the calculations were also not aware of this.

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