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Add capital gains distribution planning doc (#818 #817) - #1731
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#818 asks for a multivariate capital gains imputation instead of the current per-income-decile-independent fits. #817 reports the related failure mode of imputing gains to zero-wealth households. The imputation lives in policyengine-uk-data, not in this repo, but persist the model-facing plan here so the cross-repo agreement is discoverable. The page covers: - the current state (per-decile marginal distributions fit to HMRC CGT statistics binned by income), - three concrete limitations (overfitting boundaries, no wealth conditioning per #817, no within-decile correlation), - two candidate approaches: A. multivariate Gaussian KDE following OG-USA's bequest-transmission model; B. two-stage QRF reusing the existing imputation infrastructure already proposed in the #1621 pipeline-alignment plan, - recommendation: B (QRF) because the infrastructure exists, it handles correlated predictors naturally, and it solves both #818 and #817 in one move by adding total_wealth as a predictor, - the model-side surface (negligible, since the input variable stays the same; one new regression test for "no gains on zero-wealth households"), - open questions on the wealth donor source (FRS vs WAS) and on elasticity-by-band as a follow-up. Closes both #818 and #817 in the planning sense.
Describe the BADR, residential property and carried interest components (#1861) and the retention-rate elasticity, replace the per-decile description with the Microcosm stages that fit gains to HMRC Table 3 by size of gain and taxable income, and list what is left for #817 and #818. Type the changelog fragment. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
The Enhanced FRS is still the certified default. Describe the BADR elasticity switch added on 1 October (off by default), the six Microcosm CGT stages including the incidence anchor and residential split, and the income-band (not decile) spline in policyengine-uk-data. Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
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Summary
docs/book/assumptions/capital-gains-distribution-plan.md.Updated in October
75167a68) instead of the old per-decile model.818.added.md.Test plan
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