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Business Advice
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Page 14 of 30
Budget 2005
 Capital gains tax
Rates
- individuals charged at 10%, 20% or 40% depending on their marginal rate of tax
- all trusts charged at 40%
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2005/2006
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2004/2005
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| Annual exemptions |
£
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£
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| individuals and personal representatives |
8,500
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8,200
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| trusts for disabled persons |
8,500
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8,200
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| other trusts* |
4,250
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4,100
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2005/2006
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2004/2005
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| Chattels exemption |
£
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£
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| maximum proceeds |
6,000
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6,000
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- frozen after April 1998 for individuals and trusts
- not available for assets acquired by individuals and trusts after 31 March 1998
Losses
Relief available for
- capital losses of the same tax year and those brought forward
- trading losses of same and following tax year
Taper relief
Gains on business assets*
| Number of complete years for which asset held |
Equivalent % rate for
taxpayers at
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|
% of gain chargeable
|
higher rate
|
lower rate
|
starting rate
|
| Less than 1 |
100
|
40
|
20
|
10
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| 1 |
50
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20
|
10
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5
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| 2 or more |
25
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10
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5
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2.5
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Gains on non-business assets
| Number of complete years after 5 April 1998 for which asset held† |
Equivalent % rate for
taxpayers at
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|
% of gain chargeable
|
higher rate
|
lower rate
|
starting rate
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| Less than 3 |
100
|
40
|
20
|
10
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| 3 |
95
|
38
|
19
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9.5
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| 4 |
90
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36
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18
|
9
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| 5 |
85
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34
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17
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8.5
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| 6 |
80
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32
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16
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8
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| 7 |
75
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30
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15
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7.5
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| 8 |
70
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28
|
14
|
7
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| 9 |
65
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26
|
13
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6.5
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| 10 or more |
60
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24
|
12
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6
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* The definition of business assets is complex and advice should be sought on asset classification
† Assets held on 17 March 1998 are deemed to have been held for one year at 5 April 1998 for the purposes of this relief
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Business Advice