Do you have capital gains to report for tax year 2024/25? If so, make sure you complete your tax return correctly.
A change to capital gains tax rates took effect part-way through tax year 2024/25, meaning that extra care is needed when reporting capital gains and losses on your tax return. We have updated our guidance on capital gains tax to include more detailed information on how to complete the capital gains pages of your return and calculate your capital gains tax liability correctly.
At the Budget announcement on 30 October 2024 the government confirmed an immediate increase to some capital gains tax (CGT) rates. This is unusual, as capital gains tax rates usually apply for a whole tax year.
As a result of the announcement, the rate of capital gains tax applicable to disposals of assets during the tax year ended 5 April 2025 (referred to as tax year 2024/25) can vary between 10% and 28% depending on a number of factors, including the date of the disposal and the type of asset disposed of.
There is a risk that some taxpayers could unintentionally complete their 2024/25 tax returns incorrectly and underpay their capital gains tax liability. This is because HMRC’s online self assessment software is unable to identify the correct capital gains tax rate to apply to disposals made in the year. The software automatically calculates the capital gains tax due using the tax rates which applied up to 29 October 2024. It does not calculate any additional capital gains tax payable due to the higher tax rates which apply to some gains on disposals made on or after 30 October 2024.
The 2024/25 tax return includes an ‘adjustment’ box which taxpayers must complete to report any additional capital gains tax due as a result of the in-year increase in the tax rates. HMRC have produced a calculator to help people calculate the figure to include in this box.
Our updated capital gains tax reporting guidance includes additional information on the special capital gains tax reporting rules for 2024/25.
We have also added some information to our guidance on capital losses to explain how you can use any available capital losses to lower your capital gains tax liability.
Our updated capital gains tax guidance pages can be found here:
If you have already submitted your 2024/25 tax return and need to change any of your entries, you can make an amendment to your return at any time until 31 January 2027.
