Taxation of Chargeable Gains Act 1992 section 4BA

Rates, and use of unused basic rate band, in certain cases

Section 4BA establishes the capital gains tax rates that apply when an individual has both business asset disposal relief gains and other chargeable gains in the same tax year, and explains how the basic rate band is allocated between them.

• Where an individual has gains qualifying for business asset disposal relief alongside other chargeable gains, the business asset disposal relief gains are taxed first, using up the available basic rate band before other gains.
• Business asset disposal relief gains falling within the basic rate band are taxed at 10%, and any such gains exceeding the basic rate band are also taxed at 10%.
• The remaining basic rate band, after business asset disposal relief gains have been allocated, is then available for the individual's other chargeable gains, which are taxed at the standard capital gains tax rates (10% within the basic rate band, 20% above it for most assets).
• This ordering rule means that having business asset disposal relief gains reduces the amount of basic rate band available for an individual's other gains, potentially pushing more of those other gains into the higher rate.

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