This section applies for the purpose of determining the rate of capital gains tax that applies to gains accruing to an individual in a tax year that are not carried interest gains and, in the following provisions of this section, references to gains (or amounts chargeable to capital gains tax) do not include carried interest gains.
If any of an individual's income for a tax year is chargeable to income tax at a higher income tax rate, gains accruing to the individual in the tax year are charged at the rate of 24%.
If—
the excess ("the higher rate excess") is charged at the rate of 24%.
The remainder of this section sets out special rules which apply depending on the nature of the gains within subsection (2)(b).
If—
that unused part is used fully against those gains.
The effect of so doing is that other gains comprised in the higher rate excess are then charged at the rate of 24%.
If the total amount of the entrepreneur or investor gains does not exceed the unused part of the individual's basic rate band—
The individual may allocate so much of the unused part of the individual's basic rate band as then remains to gains other than entrepreneur or investor gains.
The effect of the allocation is that the gains to which the allocation is made are charged at the rate of 18%.
Any gains to which no allocation is made are charged at the rate of 24%.