Business & Accountancy Services
Capital Gains Tax
CAPITAL GAINS TAX RATES 2007/2008 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. Individuals as income tax -taxed as top slice of savings income (20%/40%) Entrepreneurs' relief - produces an effective rate of N/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 Trusts 40% 18% ANNUAL EXEMPTIONS Individuals* £9,200 £9,600 Transfers between spouses and civil partners living together are exempt. Principal private residence (PPR) Chattels exemption (proceeds per item or set) £6,000 Marginal relief 5/3 excess over £6,000 Enterprise Investment Scheme (EIS)
and Venture Capital Trust (VCT)
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 chargeable Effective tax rate for higher rate taxpayer Business Assets Under 1 year 100% 40% 1 complete years 50% 20% 2 complete years or more 25% 10% Non-Business Assets Under 1 year 100% 40% 1 complete years 100% 40% 2 complete years 100% 40% 3 complete years 95% 38% Reduces by 5%pa until after 10 complete years or more 60% 24% Add 1 bonus year if asset held at 17/03/1998