Jurisdiction(s):
United Kingdom

Key definition

Pro forma definition

What does Pro forma mean? Pro forma describes illustrative information or documents prepared “for the sake of form”, commonly used to show what a company’s financial position or results would look like as if a proposed acquisition, disposal or reorganisation had already occurred. The term is descriptive rather than statutory, but “pro forma financial information” is specifically regulated in capital markets disclosures (UK: FCA Prospectus Regulation Rules; Ireland: EU Prospectus Regulation), and may require an independent assurance report. Key features of pro forma financial information include a basis on historical figures with adjustments that are directly attributable to the transaction, factually supportable and expected to have...

UK Capital Gains Tax: Pro Forma Calculation with Notes on Rates, Losses, Business Asset Disposal Relief, Investors’ Relief and Trustees’ Exempt Amounts

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Practice notes

Calculation for an individual (or trust or estate)

Proceeds xxxxxx
Less: sale costs xxxxx; original cost xxxxx; improvements xxxxx; total costs xxxxxx
Gain before reliefs xxxxxx; less: brought‑forward/current year losses xxxxxx
Gain before annual exemption xxxxxx; annual exempt amount xxxxx; taxable gain xxxxxx; tax at relevant rate xxxxx

Notes to the computation

Base cost: purchase price plus improvements, or 31 March 1982 value (including pre‑1982 improvements) if held then, even if lower; legal/agents’ fees are part of acquisition/disposal costs; only improvements still present at sale are allowable.
Rates: 10% with business asset disposal or investors’ relief; otherwise 10%, 18%, 20%, 24% or 28%. Residential property or carried interest can attract higher rates. Offset losses and the annual exemption first against higher‑rated gains.
Non‑relieved gains get 10% (18% for residential/carried interest) only if taxable income plus relieved gains sit within the basic rate band.
Brought‑forward losses may only reduce this year’s taxable gain to the annual exemption; any surplus is carried forward.
Gifts: use market value less any held‑over gain. Rollover: deduct deferred gain from cost. Trustees’ annual exemption is half the individual amount, split across current trusts of the same settlor, minimum one‑fifth per trust...

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Web page updated on 21/05/2026

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