CG73643 - Dwellings subject to ATED: computation of gains and losses: Rule for certain disposals to which both ATED-related CGT and Non-Resident CGT relate – examples

Asset held on 5 April 2013 and always within the scope of ATED (re-working of CG73628 example 1)

Acquisition in April 2014 for £4,000,000 (re-working of CG73634 example 1)

  1. Asset held on 5 April 2013 and always within the scope of ATED (re-working of CG73628 example 1)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) Amount
  700
Pre April 2015 ATED chargeable days 365
Post April 2015 ATED chargeable days 335
Total days 6 April 2013 to 5 April 2015 730
Total days 6 April 2015 to disposal 365

Step 1

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

Disposal proceeds Amount
- £6,000,000
Market value at 5 April 2015 £5,600,000
Notional post April 2015 gain £400,000
Relevant days Amount
Days in relevant ownership period from April 2015 which are ATED chargeable days (CD) 335
Days in the relevant ownership period from April 2015 to the date of disposal (TD) 365

CD/TD x notional post-April 2015 gain ((335/365)) x £400,000) = £367,123

Post-April ATED related chargeable gain £367,123

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Step 2

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

Date Amount
Market value at 5 April 2015 £5,600,000
Market value at 5 April 2013 £5,000,000
Notional pre April 2015 gain £600,000
Relevant days Amount
Days in relevant ownership period from April 2013 which are ATED chargeable days (CD) 365
Days in the relevant ownership period from April 2013 to April 2015 (TD) 730

CD/TD x notional pre-April 2015 gain ((365/730)) x £600,000) = £300,000

Pre-April ATED related chargeable gain £300,000

Step 3

Add step 1 to step 2

Related gain Amount
Post-April 2015 ATED-related gain £367,123
Pre-April 2015 ATED-related gain £300,000
ATED-related gain £667,123

This differs slightly from the ATED-related gain of £639,269 which would arise if the disposal was not also subject to Non-Resident CGT (see CG73628). This is to prevent part of the gain from being subject to both charges.

To calculate the Non-Resident CGT charge on the gain see CG73860P.

2. Acquisition in April 2014 for £4,000,000 (re-working of CG73634 example 1)

Basic information:

Residential property acquired April 2014 for £4,000,000 and disposed of April 2018 for £6,000,000.

Total number of days chargeable to ATED Amount
- 730
Total days April 2014 to April 2015 365
Total days April 2015 to April 2018 1,095

Market value at 5 April 2015 is £4,250,000

The amount of the gain or loss which is ATED-related will depend on when the ATED chargeable days fall. This is demonstrated by the two different calculations below.

Situation 1: If all days chargeable to ATED fall after 5 April 2015

Step 1

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

Disposal proceeds Amount
- £6,000,000
Market value at 5 April 2015 £4,250,000
Notional post April 2015 gain £1,750,000
Relevant days Amount
Days in relevant ownership period from April 2015 which are ATED chargeable days (CD) 730
Days in the relevant ownership period from April 2015 to the date of disposal (TD) 1,095

CD/TD x notional post April 2015 gain ((730/1,095)) x £1,750,000) = £1,166,667

Post-April ATED related chargeable gain £1,166,667

Step 2

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

Market value at 5 April 2015 £4,250,000

Auisition cost £4,000,000

Notional pre-April 2015 gain £250,000

Days in relevant ownership period from acquisition which are ATED chargeable days (CD)

Days in the relevant ownership period from acquisition to April 2015 (TD) 365

CD/TD x notional pre-April 2015 gain ((0/365)) x £250,000) = £0

Pre-April ATED related chargeable gain £0

Step 3

Add step 1 to step 2

Gain Amount
Post-April 2015 ATED-related gain £1,166,667
Pre-April 2015 ATED-related gain £0
ATED-related gain £1,166,667

Situation 2: If all days chargeable to ATED fall at the beginning of the ownership period

Step 1

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

Disposal proceeds Amount
- £6,000,000
Market value at 5 April 2015 £4,250,000
Notional post April 2015 gain £1,750,000

Days in relevant ownership period from April 2015 which are ATED chargeable days (CD) 365

Days in the relevant ownership period from April 2015 to the date of disposal (TD) 1,095

CD/TD x notional post April 2015 gain ((365/1,095)) x £1,750,000) = £583,333

Post-April ATED related chargeable gain £583,333

Step 2

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

Market value Amount
Market value at 5 April 2015 £4,250,000
Acquisition cost £4,000,000
Notional pre-April 2015 gain £250,000
Days Number
Days in relevant ownership period from acquisition which are ATED chargeable days (CD) 365
Days in the relevant ownership period from acquisition to April 2015 (TD) 365

CD/TD x notional pre-April 2015 gain ((365/365)) x £250,000) = £250,000

Pre-April ATED related chargeable gain £250,000

Step 3

Add step 1 to step 2

Gain Amount
Post-April 2015 ATED-related gain £583,333
Pre-April 2015 ATED-related gain £250,000
ATED-related gain £833,333

These amounts differ from the ATED-related gain of £1,000,000 which would arise if the disposal was not also subject to Non-Resident CGT (see CG73634). This prevents part of the gain from being subject to both charges.

To calculate the Non-Resident CGT charge on the gain see CG73877.