Selling a property or investment: chargeable gains on your CT600

Short version. When your company sells a property, shares or another investment for more than it cost, the profit is a chargeable gain, taxed at normal Corporation Tax rates through boxes 210 to 220 of the CT600. SimpleCompanyTax supports simple gains: you work out the gain (we show you how below), enter it in Chargeable gains (gross) under Tax adjustments, and enter any capital losses in the two fields below it, split into losses on this year’s disposals and losses brought forward from earlier years. We apply the loss rules, fill every box, and carry unused losses forward. The accounting profit on the sale goes in Profit on disposal of fixed assets so your accounts stay right too.

How company gains are taxed

Companies do not pay Capital Gains Tax. Instead, a chargeable gain is added to the company’s taxable profits and charged at the normal Corporation Tax rates, alongside any trading profit, rental income and interest. A big gain can move the company into a higher Corporation Tax band, and we handle that automatically, including marginal relief.

One distinction matters before anything else. If the company lets out property and sells one, the sale is normally a chargeable gain. If the company’s business is buying, developing and selling property, sales are trading income (turnover), not gains. If you are not sure which side your company falls on, ask an accountant before filing.

Working out the gain

You compute the gain, and we do everything after that. The calculation:

1. Sale proceeds (less selling costs: legal fees, agent fees).
2. Minus what the company paid for the asset, plus buying costs (legal fees, stamp duty land tax, survey fees).
3. Minus improvement costs still reflected in the asset (an extension, or a new roof that was an improvement), but not repairs already claimed against rent.
4. Minus indexation allowance if the company owned the asset before December 2017. Indexation compensates for inflation between purchase and December 2017 (it was frozen then), using HMRC’s published factors. Assets bought from January 2018 onwards get no indexation.

A worked example. The company bought a flat to let in 2019 for £150,000 with £3,000 of buying costs, and sells it for £220,000 with £4,000 of selling costs. The chargeable gain is 220,000 − 4,000 − 150,000 − 3,000 = £63,000 (no indexation, bought after 2017). If the company sold several assets in the period, add the gains together and enter one combined figure.

Where to enter it in SimpleCompanyTax

1. In Tax adjustments, select “Add a capital gain (sold a property or investment)”.
2. Enter the combined gain in Chargeable gains (gross). We report it in box 210.
3. Enter any losses on assets sold in this period in Capital losses on this year’s disposals. HMRC wants those in a box of their own (box 825), which is why they are separate.
4. Enter unused losses from earlier years in Capital losses brought forward. We set both amounts against your gains (box 215, automatically capped at your gross gains), report the net gain in box 220, and add it to your taxable profits.

The live tax estimate updates as you type, and the tax computation we file shows the gain as its own line, so HMRC sees exactly how your total profits were built up.

One point worth knowing if you are reading last year’s return to find your brought forward figure. Box 825 is not your carry forward. It is headed “amount arising”, so it shows only the losses that arose in that period, not the running total you still have available. Take the brought forward figure from the Losses carried forward to the next period section of the tax computation instead. Every filing we produce includes one.

Capital losses

Capital losses follow their own rules: they can only be set against chargeable gains, never against trading profit or rental income. There are two fields, because HMRC asks for the losses that arose in this period in a box of their own. Enter losses on assets you sold this period in Capital losses on this year’s disposals, and any unused losses from earlier years in Capital losses brought forward. We set both against your gains, use what can be used, and carry the rest forward. The remaining figure appears in the tax computation we produce, under “Losses carried forward to the next period”, which is where to find it for next year.

Two things that are not allowable losses, so leave them out. Plant or equipment sold below cost gives no capital loss, because capital allowances already gave that relief. And indexation can reduce a gain to nil but can never create or increase a loss.

If losses are bigger than gains, no gain is taxed and the surplus carries forward. It never reduces your other profits.

The accounts side

Your accounts show the sale too, and usually with a different number: the accounts show the profit over the asset’s book value, while the tax gain is measured against original cost with indexation. Enter the accounting profit on the sale in Profit on disposal of fixed assets (in the profit and loss section). It appears as Other income in your accounts and is automatically kept out of your taxable trading profit, because the tax on the sale is dealt with through the chargeable gain you entered. Remember to update the balance sheet as well: the sold asset comes out of fixed assets, and the proceeds appear in cash or debtors.

When you need an accountant

Our support covers simple gains. Speak to an accountant if any of these apply:

• The sale was to a connected party (a director, shareholder or related company).
• You hold the same shares bought at different times and are unsure which ones you are treated as having sold. The share identification and pooling rules decide this, and we do not automate them. See companies that own property and shares.
• Share disposals that may qualify for the Substantial Shareholdings Exemption (an exempt gain is left out of the return entirely, and confirming the exemption needs advice).
• ATED-related or non-resident gains.
• The nominal and indexed gain need presenting separately, or ownership is complex.
• You are unsure whether the sale is a gain at all (see the trading-versus-investment point above).

This article is general guidance, not tax advice. See also property income and losses and balancing charges when selling equipment. The three articles together cover the whole disposal story.