1.Apply Annual Exemption of £6,000
2. Gains which qualify for BADR are taxed first at 10%
3. Then the unused part of the Income Tax basic rate band (£37,700 after personal allowance) is used to tax gains at the standard rate 10% or 18% (if residential property). Remember that basic band can be extended if taxpayer gift aided or paid into private pension.
4. Once the £37,700 limit is reached gains are taxed at the higher rate of 20% or 28% (if residential property).