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Page 15 of 32
Budget 2006
Capital gains tax
Rates
- individuals charged at 10%, 20% or 40% depending on their marginal rate of tax
- all trusts charged at 40%
| |
2006/2007
|
2005/2006
|
| Annual exemptions |
£
|
£
|
| individuals and personal representatives |
8,800
|
8,500
|
| trusts for disabled persons |
8,800
|
8,500
|
| other trusts1 |
4,400
|
4,250
|
|
1 Reduced pro-rata if more than one trust per settlor subject to minimum of 10% of full amount
| |
2006/2007
|
2005/2006
|
| Chattels exemption |
£
|
£
|
| maximum proceeds |
6,000
|
6,000
|
|
Other main exemptions
- principal private residence
- Treasury stock and qualifying corporate bonds
- shares in enterprise investment scheme companies, venture capital trusts, personal equity plans, individual savings accounts or child trust funds
- passenger vehicles
- certain gifts of assets to charities
Indexation allowance
- 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 assets2
| Number of complete years for which asset held |
Equivalent % rate for
taxpayers at
|
|
% of gain chargeable
|
higher rate
|
lower rate
|
starting rate
|
| Less than 1 |
100
|
40
|
20
|
10
|
| 1 |
50
|
20
|
10
|
5
|
| 2 or more |
25
|
10
|
5
|
2.5
|
|
Gains on non-business assets3
| Number of complete years after 5 April 1998 for which asset held4 |
Equivalent % rate for
taxpayers at
|
|
% of gain chargeable
|
higher rate
|
lower rate
|
starting rate
|
| Less than 3 |
100
|
40
|
20
|
10
|
| 3 |
95
|
38
|
19
|
9.5
|
| 4 |
90
|
36
|
18
|
9
|
| 5 |
85
|
34
|
17
|
8.5
|
| 6 |
80
|
32
|
16
|
8
|
| 7 |
75
|
30
|
15
|
7.5
|
| 8 |
70
|
28
|
14
|
7
|
| 9 |
65
|
26
|
13
|
6.5
|
| 10 or more |
60
|
24
|
12
|
6
|
|
3 The definition of business assets is complex and advice should be sought on asset classification
4 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