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Capital Gains Tax Adjustment for 2024 to 2025
Capital Gains Tax rates changed partway through the 2024 to 2025 tax year, on 30 October 2024. If you sold assets on or after that date, HMRC's Self Assessment system will not automatically calculate your tax at the correct rates. This article explains how to work out the adju...
Capital Gains Tax rates changed partway through the 2024 to 2025 tax year, on 30 October 2024. If you sold assets on or after that date, HMRC's Self Assessment system will not automatically calculate your tax at the correct rates. This article explains how to work out the adjustment you may need to make when completing your tax return.
What changed on 30 October 2024
The main Capital Gains Tax rates increased for disposals of assets on or after 30 October 2024. This affected most types of assets, including business assets, shares, and personal possessions.
The rates for residential property and carried interest remained unchanged.
Because the rates changed mid-year, the Self Assessment tax return for 2024 to 2025 will not automatically apply the correct rates to gains made after 30 October 2024. You may need to calculate an adjustment manually and include this in your return.
Who needs to work out an adjustment
You need to use HMRC's adjustment calculator if all of the following apply:
- You disposed of assets on or after 30 October 2024
- You are completing a Self Assessment tax return for 2024 to 2025 as an individual, trustee, or personal representative
- Your overall capital gains are above the annual exempt amount (the tax-free allowance for Capital Gains Tax)
For the 2024 to 2025 tax year, the annual exempt amount is £3,000.
Do not use the calculator if you do not qualify for the annual exempt amount.
If you use commercial software
If you submit your Self Assessment tax return using commercial software rather than HMRC's online system, you need to check whether the software applies the correct rates for disposals on or after 30 October 2024. Contact your software provider if you are unsure.
Information you need before calculating your adjustment
Before using HMRC's adjustment calculator, you must work out your capital gains and calculate how much tax you owe using the standard method.
You also need to check two specific rules that may affect your calculation:
Anti-forestalling rules: These rules prevent people from artificially bringing forward or delaying disposal dates to take advantage of rate changes. Check the guidance on page CG10249 of the Capital Gains manual to confirm you are using the correct disposal date. You may need to include a statement with your tax return if the anti-forestalling rules apply.
Losses between connected people: Special rules apply when offsetting losses from transactions with family members or other connected people. Review the guidance on page CG14561 of the Capital Gains manual to make sure you offset these losses correctly.
To complete the adjustment calculator, you will need:
- The date of disposal for each asset sold
- The amount of gains made
- Your taxable income for the year
- Details of any capital losses you are using
- Details of any pension scheme contributions or Gift Aid payments you have made
Pension contributions and Gift Aid payments can affect how much of your gain falls into the basic rate or higher rate tax bands, which is why the calculator needs this information.
How to use the calculator
HMRC provides an online adjustment calculator specifically for the 2024 to 2025 tax year. You access this through the GOV.UK website.
The calculator will work out the additional tax due (or reduction in tax) based on the higher rates that apply to disposals on or after 30 October 2024. You then include this adjustment figure in the appropriate box on your Self Assessment tax return.
Keep a record of the calculation and the figures you entered, as HMRC may ask to see these if they have questions about your return.
When this adjustment applies
This adjustment process is specific to the 2024 to 2025 tax year because the rate change happened mid-year. For the current tax year (2025/26) and future years, the Self Assessment system should calculate Capital Gains Tax correctly without requiring a manual adjustment, as the rates will apply for the full year.
Getting help
Working out Capital Gains Tax can be complex, particularly when rates have changed during the year or when anti-forestalling and connected person rules may apply. If you are unsure about any aspect of your calculation or adjustment, speak to an accountant or tax adviser.
Sources
This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.
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