HMRC Capital Gains Tax example

Dal_Whinnie

I thought I understood how the relevant CGT rates are determined. That is basic rate (18%) applies to any gain where the total gain (net of £3,000 allowance) plus taxable income (net of personal allowance) are less than £37,700 (current basic rate level). Where these total more than £37,700 then, where the taxable income less personal allowance is more than £37,700 then the whole gain (net of £3,000 allowance) is taxable at 24%. If the taxable income less personal allowance is less than £37,700 then the balance up to £37,700 is taxed at 18% and the balance at 24%.
However, looking at the following example from HMRC website I just cannot work out how they have calculated the amount of gain taxable at 18% and 24%. Can anyone explain to me please?

You make a gain (not from carried interest) on or after 6 April 2025. Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000 and your taxable gains are £52,600.
First, deduct the Capital Gains tax-free allowance from your taxable gain. For the 2025 to 2026 tax year the allowance is £3,000, which leaves £49,600 to pay tax on.  
Add this to your taxable income. Because the combined amount of £69,600 is more than £37,700 (the basic rate band for the 2025 to 2026 tax year), you will pay Capital Gains Tax at 18% on £30,270 and then 24% on £19,330.
This means you will pay £10,087.80.

RacingDriver

They include the personal allowance (£12,570)

£12,570 + £37,700 = £50,270

£50,270 - £20,000 = £30,270 taxable at 18%

£69,600 - £50,270 = £19,330 taxable at 24%

Dal_Whinnie

But they say that "Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000" so surely that means that your income is £32,570 (assuming personal allowance of £12,570) and your chargeable gains are £49,600 giving £82,170 before any allowances so that answer should be:

 £12,570 + £37,700 = £50,270

£50,270 - £32,570 = £17,700 taxable at 18%

£82,170 - £50,270 = £31,900 taxable at 24%

[Deleted User]

Dal_Whinnie said:

But they say that "Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000" so surely that means that your income is £32,570 (assuming personal allowance of £12,570) and your chargeable gains are £49,600 giving £82,170 before any allowances so that answer should be:

 £12,570 + £37,700 = £50,270

£50,270 - £32,570 = £17,700 taxable at 18%

£82,170 - £50,270 = £31,900 taxable at 24%

Yep - the example is rubbish and uses the personal allowance twice! 

It is wrong to say that £30270 of the basic rate band remains if £20000 of it has been already utilised!

Strummer22

[Deleted User] said:

Dal_Whinnie said:

But they say that "Your taxable income (your income minus your Personal Allowance and any Income Tax reliefs) is £20,000" so surely that means that your income is £32,570 (assuming personal allowance of £12,570) and your chargeable gains are £49,600 giving £82,170 before any allowances so that answer should be:

 £12,570 + £37,700 = £50,270

£50,270 - £32,570 = £17,700 taxable at 18%

£82,170 - £50,270 = £31,900 taxable at 24%

Yep - the example is rubbish and uses the personal allowance twice! 

It is wrong to say that £30270 of the basic rate band remains if £20000 of it has been already utilised!

I used the feedback form on that page to give feedback to HMRC. Whether anyone will actually read it is another matter.