capital gains calculation on sale of 2nd property

If only!

I don't think clearance costs count. Refurbishment costs don't count either. They're either "repairs and maintenance" which go in the expenses of the rental, or they're enhancements which are added to the acquisition costs.

You forgot to add the incidental acquisition costs (survey, legal fees). But let's assume they're included.

More correctly this would be known as "Gain before indexation".

No, this is not quite right. The indexation allowance has to come first. You take 0.537 x £39500 which is £21212. This comes off your "gain before indexation" of £36761 to give your "indexed gain" of £15549.

Next comes PRR, at 89/180 of £15549, which is £7689.

There is also Lettings Relief, which you forgot about, this applies to the amount by which PRR is restricted as a result of letting. So provided you have been letting for the 91 months for which you are not entitled to PRR, then you're entitled to Lettings Relief of 91/180 of £15549, but this is capped at the lower of £40k or the actual amount of PRR. So in your case LR is restricted to £7689.

Your "chargeable gain" is therefore £15549-2x£7689 = £171.

Your calculation of the Taper Relief rate as 20% is right, but since the chargeable gain is below your two CG allowances put together, there is no point applying it.

Yes, that's right. Even without Lettings Relief, your chargeable gain would only have been £7860, which is already less than one person's CG allowance, never mind two.

In message , Ronald Raygun writes

Is it also the case that, if you do not normally fill in a return, (e.g. employed on PAYE), or have not been asked to do so by the revenue, you do not have to declare a gain if no tax is due - thereby saving the hassle of asking for, and completing, a return?

Or is there a minimum "gain before allowances", below which the above applies?

For 2002-03, if the disposal of chargeable assets was less than 15,400 , then no Return has to be completed.