HMRC warns taxpayers about mid-year Capital Gains Tax changes

HMRC has issued a warning to taxpayers completing their Self Assessment tax returns that their online software cannot automatically make calculations to account for the mid-year increase in the rate of Capital Gains Tax (CGT) in 2024.

Announced in Labour’s first Budget in October 2024, the increase in CGT was immediate, but HMRC did not update its software to process the change.

As a result, taxpayers need to manually account for their CGT liability across the split year, instead of using HMRC calculators, and then enter the information into box 51 of the CGT summary pages on the Self Assessment tax return.

This change will affect taxpayers who have sold taxable assets, including second homes, shares and crypto assets, after 30 October 2024.

HMRC said that people “may need to work out an adjustment to the tax automatically calculated using the adjustment calculator on gov.uk.”

How did the rates of CGT change in 2024?

On 30 October 2024, the main CGT rates were raised to 18 per cent for basic rate taxpayers and 24 per cent for higher rate taxpayers.

The Chancellor’s decision to apply the tax increase immediately, on the day of the Budget, was designed to prevent taxpayers from adjusting their plans to avoid the higher rate.

If you made a gain during this period and require advice or support calculating and reporting your tax liabilities, please get in touch with our team.