If you’ve sold shares, a second property, cryptocurrency or other assets since last autumn, this is one of those years where a little extra attention really matters.
In October 2024, the government increased Capital Gains Tax (CGT) rates. The change took effect immediately on 30 October 2024, rather than from the start of the next tax year. This has created a headache, as taxpayers need to manually calculate their CGT liability for the 2024/25 tax year, with tax returns due on 31 January 2026. They cannot rely on the usual automatic figure calculated by the HMRC software.
Why has this problem occurred? HMRC’s own self assessment software hasn’t been updated to cope with a mid-year CGT rate change.
What changed?
From 30 October 2024:
- The main CGT rate for basic rate taxpayers increased to 18%
- ·The higher rate increased to 24%
This timing was introduced to prevent rushed asset sales to avoid the increase. However, HMRC’s systems cannot cope with different tax rates across the same tax year.
If you disposed of assets between 30 October 2024 and 5 April 2025, HMRC’s online self assessment system is likely to calculate your capital gains tax using the old, lower rates for the entire year. As a result:
- The calculation shown on your return may be wrong.
- You could accidentally underpay tax.
- HMRC penalties and interest may follow.
Normally, HMRC’s software does the maths for you. This year, for CGT, it doesn’t.
What happens with CGT this tax year?
For this tax year, capital gains tax needs to be manually adjusted to reflect the split-year rates.
HMRC has provided an online CGT adjustment calculator on gov.uk. This tool works out the difference between what the system calculates automatically and what you actually owe under the new rates.
Once you’ve used the calculator:
- The adjustment figure must be entered into Box 51 of the Capital Gains Tax summary pages on your tax return.
- It’s best to save the calculator results and attach them to your return as supporting evidence.
Are you working with the re:accounts team?
If so, be reassured that we know all about the changes and reflect the mix of rates when calculating your CGT tax liability.
If not, talk to us about how we can save you stress and potential penalties by calculating your tax and adjusting it to reflect relevant changes to tax rates. That’s what we’re here for.
