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HMRC internal manual

Capital Gains Manual

Non-Resident Capital Gains Tax (NRCGT) – Disposals on or after 6 April 2015 to 5 April 2019: Interaction between Non-Resident CGT and ATED-related CGT: Gain or loss not ATED-related or NRCGT computations, examples

  1. Balancing gain or loss calculated under para 17

  2. Balancing gain or loss calculated under para 18

  3. Balancing gain or loss calculated under para 19

 

  1. Balancing gain or loss calculated under para 17

 

For the ATED-related gain or loss in this scenario see example 1 in CG73643.

For the Non-resident CGT gain or loss in this scenario see example 1 at CG73877.

 

Basic information:

Residential property acquired April 2006 for £3,000,000 and disposed of April 2016 for £6,000,000.

The property had a value of £5,000,000 at 5 April 2013 and a value of £5,600,000 at 5 April 2015.

 

Total number of days chargeable to ATED (say)       700

Pre April 2015 ATED chargeable days                      365

Post April 2015 ATED chargeable days                     335

Post April 2015 S14D (NRCGT) chargeable days     30

Total days 6 April 2013 to 5 April 2015                     730

Total days 6 April 2015 to disposal                            365

 

Estimated Indexation factors:

April 2006 to April 2013        0.3

            April 2015 to April 2016        0.035

            April 2013 to April 2015        0.078

 

Balancing gain or loss belonging to the notional post-April 2015 gain or loss

 

Determine the amount of the post-April 2015 gain or loss

 

Disposal proceeds                               £6,000,000

Market value at 5 April 2015              £5,600,000

Indexation allowance                          £196,000

Notional post April 2015 gain            £204,000

 

Balancing fraction

 

BD = balancing days in appropriate ownership period            0

TD = total days in appropriate ownership period                   365

 

BD/TD x notional post-April 2015 gain = 0

 

Balancing gain or loss belonging to the notional pre-April 2015 gain or loss

 

Determine the amount of the pre-April 2015 gain or loss

 

Market value at 5 April 2015  £5,600,000

Market value at 5 April 2013  £5,000,000

Indexation allowance              £390,000

Notional pre April 2015 gain  £210,000

 

Non-ATED related fraction

 

NAD = Non-ATED chargeable days                         365

TD = Total days in appropriate ownership period      730

 

NAD/TD x notional pre April 2015 gain = £105,000

 

Notional pre-April 2013 gain

 

Market value at 6 April 2013  £5,000,000

Acquisition cost                      £3,000,000     

Indexation allowance              £900,000        

Notional pre April 2013 gain  £1,100,000

 

Add together:

Balancing gain belonging to the notional post-April 2015 gain                     £0

Balancing gain belonging to the notional pre-April 2015 gain                       £105,000

Notional pre-April 2013 gain                                                                          £1,100,000

Balancing gain (neither ATED-related not an NRCGT gain)                  £1,205,000

 

Summary

 

 

ATED-related gain 667,123 The unindexed gain across the 700 ATED chargeable days
     
NRCGT gain 16,767 The indexed gain across the 30 NRCGT chargeable days
Balancing gain 1,205,000 The indexed gain across the 2,920 balancing days in the ownership period
Total gains 1,888,890  

 

  1. Balancing gain or loss calculated under para 18

 

For the ATED-related gain or loss in this scenario see example 2 in CG73634.

For the Non-resident CGT gain or loss in this scenario see example 1 at CG73884.

 

Basic information:

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

 

Estimated Indexation factor October 2015 to April 2018 0.20

 

Total number of days chargeable to ATED                730

Total S14D (NRCGT) chargeable days                      913

Total days October 2015 to April 2018                      913     

 

Determine the amount of gain or loss

 

Disposal proceeds                   £2,500,000

Acquisition cost                      £1,500,000

Indexation allowance              £300,000

Gain                                        £700,000

 

As 730 days are chargeable to ATED, and 913 days are S14D days (NRCGT days), there are no balancing days, and so no balancing gain.

 

The calculation would be:

 

BD = 0

 

TD = 913

 

BD/TD x £700,000 = 0

 

If there were days in the relevant ownership period which were not chargeable to ATED or NRCGT (because, for example, the building was not a dwelling), these would be balancing days and so there would be a balancing gain.

 

Summary

 

ATED-related gain 799,562 The unindexed gain across the 730 ATED chargeable days
     
NRCGT gain 140,307 The indexed gain across the 913 NRCGT chargeable days
Balancing gain   No balancing gain as there are no balancing days in the ownership period
Total gains 939,869  

 

  1. Balancing gain or loss calculated under para 19

 

For the ATED-related gain or loss in this scenario see example 3 in CG73628.

For the Non-resident CGT gain or loss in this scenario see the example at CG73891.

 

Basic information:

Residential property acquired April 2010 for £300,000 and disposed of 7 April 2018 for £700,000.

The property had a value of £500,000 at 5 April 2015 and £550,000 at 5 April 2016.

 

Estimated Indexation factors are:

            April 2015 to April 2016        0.013

April 2016 to April 2018        0.019

April 2010 to April 2015        0.158

 

Total number of days chargeable to ATED                            200

Total days 6 April 2016 to day preceding disposal                730

Pre April 2016 S14D (NRCGT) chargeable days                   365

Post April 2016 S14D (NRCGT) chargeable days                 530

 

Balancing gain or loss belonging to the notional post-April 2016 gain or loss

 

Disposal proceeds                               £700,000

Market value at 5 April 2016              £550,000

Indexation allowance                          £10,450

Notional post-April 2016 gain            £139,550

 

Balancing fraction

 

BD = balancing days in appropriate ownership period           0

TD = total days in appropriate ownership period                   730

 

BD/TD x notional post-April 2016 gain = 0

 

Balancing gain or loss belonging to the notional pre-April 2016 gain or loss

 

Market value at 5 April 2016  £550,000

Market value at 5 April 2015  £500,000

Indexation allowance              £6,500

Notional pre-April 2016 gain  £43,500

 

BD = balancing days in appropriate ownership period           0

TD = total days in appropriate ownership period                   365

 

BD/TD x Notional pre-April 2016 gain = 0

 

Notional pre-April 2015 gain or loss

 

Market value at 5 April 2015              £500,000

Acquisition cost                                  £300,000

Indexation allowance                          £47,400

Notional pre-April 2015 gain              £152,600

 

 

Add together:

Balancing gain belonging to the notional post-April 2016 gain         £0

Balancing gain belonging to the notional pre-April 2016 gain           £0

Notional pre-April 2015 gain                                                              £152,600

Balancing gain (neither ATED-related not an NRCGT gain)      £152,600

 

Summary

 

ATED-related gain £41,095 The unindexed gain across the 200 ATED chargeable days
     
NRCGT gain £144,817 The indexed gain across the 895 NRCGT chargeable days
Balancing gain £152,600 The indexed gain across the 1,825 balancing days in the ownership period
Total gains £338,512