What does paragraph 9 of Schedule 4ZZC TCGA 1992 require?

Paragraph 9 requires the taxpayer to compute the residential property gain or loss on a return period interest (RPI) disposal by applying the standard chargeable gains rules with specific modifications. The computation must isolate only the residential property element from any wider gain or loss, using prescribed apportionment provisions under the schedule.

How is the gain apportioned for mixed-use property under paragraph 9?

Where a disposal involves mixed-use property that is part residential and part non-residential, the taxpayer must apportion the total gain or loss between the two elements on a just and reasonable basis. Only the residential portion is subject to the RPI rules, with the non-residential element reported through the normal self-assessment return.

What happens to the residential property gain after it is computed under paragraph 9?

The residential property gain computed under paragraph 9 feeds into the broader return period interest calculation, which determines the capital gains tax payment on account that the individual must make. This accelerated payment is due within 60 days of completion of the residential property disposal under the reporting and payment regime.

When was paragraph 9 of Schedule 4ZZC introduced and why?

Paragraph 9 was introduced by the Finance Act 2019 as part of wider reforms to the reporting and payment regime for UK residential property disposals. Its purpose is to ensure the correct amount of gain or loss is identified for the accelerated payment on account rules that apply specifically to residential property disposals.

Taxation of Chargeable Gains Act 1992 Schedule 4ZZC paragraph 9

Computation of residential property gains or losses on the RPI disposal

Paragraph 9 of Schedule 4ZZC sets out how to calculate the residential property gain or loss arising on a disposal that triggers the return period interest (RPI) rules.

The residential property gain or loss on the RPI disposal is computed by applying the standard chargeable gains rules, but with specific modifications set out in this paragraph.
The computation must take into account only the portion of the overall gain or loss that relates to the residential property element, as determined under the schedule's apportionment provisions.
Any reliefs or allowances that would normally reduce the gain must be applied in the manner prescribed by the schedule, ensuring they are allocated correctly between the residential and non-residential portions.
The resulting figure — whether a gain or a loss — feeds into the broader calculation of the individual's return period interest for the relevant period.

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