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2.3. Time limit for claim The relief must be claimed within 12 months of the 31 January following the end of the tax year in
which the disposal is made. Thus for 2022/23 by 31 January 2025 and by 31 January 2026 for
2023/24.
Example 1 On 30 September 2022 Daisy sold a business that she ran as an unicorporated trade since February
2014. The sale resulted in the following capital gains and capital losses on the disposal of the
business assets:
Goodwill
250,000
Factory
320,000
Warehouse
(90,000)
In December 2022 Daisy also sold a 20% shareholding in Bed Ltd, an unquoted company. Daisy had
been an employee of Bed Ltd from the date she acquired the shares in July 2016. The gain arising
was £370,000
Calculate Daisy’s Capital Gains Tax in 2022/23 2.4. Further points ๏
The gains qualifying for business asset disposal relief must be taken into account when
establishing which tax rate applies to other taxable gains in the tax year, in that they are
deemed to firstly use any amount of unused basic rate band.
๏
The AEA and any capital losses should however be deducted firstly from gains that do not
qualify for business asset disposal relief as they are taxed at a higher CGT rate (20% or 18%/
28%).
๏
Where the £1m lifetime limit is exceeded, gains in excess of the limit will be subject to the
normal rates of CGT.
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The easiest approach in dealing with questions that include gains qualifying for business asset
disposal relief and gains that do not qualify is to keep the gains separate.
Example 2 Anne sold her shareholding in Annie Limited for £500,000 in 2022/23. The shares had cost her
£50,000 in July 1992. She owned 100% of the shares in Annie Limited and had been a full time
director since the date of acquisition. She had not previously made any disposals qualifying for
business asset disposal relief.
In addition she sold an antique painting realising a capital gain of £100,000.
Anne had capital losses brought forward of £25,000 from 2021/22 and her taxable income for
2022/23 was £18,000.
