Capital Gains Tax in 2024/25: Why You May Need to Adjust Your Calculation Manually

If you’ve sold assets such as property, shares, or business interests between 30 October 2024 and 5 April 2025, there’s a very real chance that your Capital Gains Tax (CGT) has been calculated incorrectly — even if you’ve used HMRC’s official self-assessment tools.

The reason? In-year changes to CGT rates, announced in the Autumn Budget 2024, are not reflected in HMRC’s tax return software. This means many taxpayers could be unknowingly underpaying their tax — and risk receiving interest charges or penalties later.

What Changed with Capital Gains Tax?

On 30 October 2024, the Chancellor increased the standard CGT rates for disposals occurring from that date onwards. These changes were significant and aimed at aligning CGT rates across asset types.

Old CGT rates (before 30 October 2024):

• 10% (basic rate band)

• 20% (higher rate band)

New CGT rates (from 30 October 2024):

• 18% (basic rate band)

• 24% (higher rate band)

Gains from residential property and carried interest were already taxed at these higher rates, so there was no change for those specific gains. However, most other types of asset disposals — such as shares or general investments — are now caught by this mid-year change.

Business Asset Disposal Relief (BADR): Another Important Change

If you’re selling assets that qualify for Business Asset Disposal Relief (formerly Entrepreneurs’ Relief), the changes are also significant, but phased:

• Until 5 April 2025: Gains taxed at 10% up to the £1 million lifetime limit

• From 6 April 2025: Rate increases to 14%

• From 6 April 2026: Further increase to 18%, bringing it in line with the standard lower CGT rate

If you’re planning to sell a business or qualifying shares, the timing of that sale could impact how much CGT you pay — potentially by thousands of pounds.

Why HMRC’s Calculator May Give the Wrong Answer

The current HMRC self-assessment software treats the entire 2024/25 tax year as if the old 10%/20% rates still apply across all asset disposals. It doesn’t differentiate between disposals made before or after 30 October 2024.

This can result in an understatement of your CGT liability, particularly if you made significant disposals after that date.

How to Make the Correct Adjustment

To address this, HMRC has released a Capital Gains Tax Adjustment Calculator. It’s available online at:

www.gov.uk/guidance/workout-your-capital-gains-tax-adjustment-for-the-2024-to-2025-tax-year

The tool will help you calculate the additional CGT due based on your gain dates and amounts. Once calculated, you must manually enter this adjustment into your tax return.

When Do You Need to Make an Adjustment?

You’ll need to use the adjustment calculator if:

• You’re completing a 2024/25 self-assessment tax return

• You made a chargeable gain on or after 30 October 2024

• Your total net gains (after losses) exceed the £3,000 annual exempt amount

What You’ll Need Before Using the Calculator

To use the calculator effectively, gather the following:

• Dates and amounts of each disposal

• Taxable income for the year

• Capital losses, both current and brought forward

• Details of any Gift Aid or pension contributions, which can extend your basic rate band

Be aware: capital losses from prior years don’t need to be used unless it’s tax-efficient to do so. The calculator won’t distinguish between current and historic losses, so you may need advice before submitting.

How to Report the Adjustment

The figure calculated is not a revised CGT total — it’s the difference between HMRC’s incorrect calculation and the correct one.

• Online tax return: Enter the amount in the ‘adjustment to Capital Gains Tax’ box

• Paper return: Enter it in Box 51 on SA108

Do not just alter the CGT liability figure manually — use the correct adjustment box to ensure compliance.

Planning Opportunities

This unexpected CGT change also offers a planning opportunity — especially if you’re considering selling business assets, shares, or property.

If you’re eligible for BADR, for example, you may want to bring forward disposals before 6 April 2025 to benefit from the lower 10% rate. Delaying could increase your tax bill by 40% or more on qualifying gains.

In Summary

• HMRC’s software doesn’t reflect CGT rate changes for disposals after 30 October 2024

• You must use the official adjustment calculator to correct your return

• Adjustments apply if gains exceed £3,000 and occurred after that date

• Action is especially important for those selling shares, businesses, or non-residential assets

Need help calculating your CGT adjustment or planning a tax-efficient asset sale?

At Merranti Accounting, we’re here to ensure you get it right — and avoid costly surprises. We’ll help you make the most of available reliefs, use the correct CGT rates, and submit a fully compliant return.

Contact Merranti Accounting today to speak with one of our tax advisors.