RMH Associates
Business & Accountancy Services

Capital Gains Tax


CAPITAL GAINS TAX
RATES2007/2008
2008/2009
Companies pay corporatin tax on capital gains after indexation allowance at their normal rate. Gains and losses on sales of shareholdings of 10% or more in trading companies or groups are exempt, subject to certain exclusions.
   
Individualsas income tax -taxed as top slice of savings income (20%/40%)
18%
Entrepreneurs' relief - produces an effective rate ofN/A 10%
Entrepreneurs' relief is available in respect of gains made on the disposal of all or part of a business, or gains made on disposals of assets following the cessation of a business or gains by certain individuals who were involved in running the business.

The first £1 million of gains that qualify will be charged to CGT at an effective rate of 10%.

Gains in excess of £1 million will be charged at the normal rate of 18%. An individual will be able to make claims for relief on more than one occasion, up to a lifetime total of £1 million of gains qualifying for relief.
UK Trusts40%18%
ANNUAL EXEMPTIONS
Individuals*£9,200£9,600
Transfers between spouses and civil partners living together are exempt.
Principal private residence (PPR)
100% exempt
Chattels exemption (proceeds per item or set)£6,000
Marginal relief5/3 excess over £6,000
Enterprise Investment Scheme (EIS)
and Venture Capital Trust (VCT)
100% exempt
Trusts£4600£4800
* Individuals, trustees of settlements for the disabled, and personal representatives of the estate of a deceased person.
From 6/4/08 a £30k levy applies to certain non-UK domiciled individuals wishing to use the remittance basis of taxation.
Taper Relief - disposals 6/4/2002 - 5/4/2008% of gain chargeableEffective tax rate for higher rate taxpayer
Business Assets
Under 1 year100%40%
1 complete years50%20%
2 complete years or more25%10%
Non-Business Assets

Under 1 year100%40%
1 complete years100%40%
2 complete years100%40%
3 complete years95%38%
Reduces by 5%pa until after 10 complete years or more60%24%
Add 1 bonus year if asset held at 17/03/1998