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ER interaction with annual CGT allowance and multiple disposals

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    ER interaction with annual CGT allowance and multiple disposals

    Does anybody know how this is worked out- ie the order are any gains of different types are made against your annual allowance?

    e.g. say you make a £30K gain which qualifies for ER and a sale of a property on which you make a £20k gain and you make the gains in the same tax year.

    is it 30000-12300 = 17700 gain thus £1770 @ 10% ER
    then the full CGT on the property gain at your appropriate marginal rate.

    or does the allowance get allocated against the property?

    Account is busy and googling reveals nothing

    #2
    IANAA, but I suspected that it would work like the personal allowance for income tax, where you are entitled to to use the annual exempt amount in whichever way is most beneficial to you, so in this case you would offset it against the gains charged at the higher rate. The HMRC CGT internal manual seems to back this view up:

    F(No.2)A10/SCH1 introduces a Capital Gains Tax rates regime under which gains that accrue to an individual on or after 23 June 2010 may be taxed at either 18% or 28% (or 10% for gains that qualify for Entrepreneurs’ Relief, see CG63950+). A specific rule (TCGA92/S4B(2)) permits the annual exempt amount to be set off against gains in whatever way is most beneficial to the person concerned. The set off is to be determined by the taxpayer but it would typically be the case that the most beneficial set-off will mean setting the exemption against gains that attract a higher rate of tax in priority to gains that attract a lower rate. There is guidance and examples to illustrate this rule at CG21500+.
    CG18000 - Capital Gains Manual - HMRC internal manual - GOV.UK

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