Capital Gains Tax
| Capital gains tax rates and bands are as follows: |
| |
2007/08 |
2006/07 |
| Taxed as top slice of savings income |
|
|
| Annual exemption |
|
|
| - individual |
£9,200 |
£8,800 |
| - settlement(s) (spread over total number) |
£4,600 |
£4,400 |
| Transfers between husband and wife living together are exempt |
| |
| Chattels exemption |
|
|
| (proceeds per item or set) |
£6,000 |
£6,000 |
|
Taper Relief
For gains realised after 5 April 1998 by individuals or trustees, indexation allowance is frozen and the gain reduced by a tapering relief. The value of the taper relief depends on whether or not the asset is a business asset, and on the number of complete years the asset has been held after 5 April 1998 (with an additional "bonus" year for non-business assets held on 16 March 1998).
| Non-Business Assets |
No. of complete years
held after 5 April 1998 |
% gain chargeable |
| 1 |
100 |
| 2 |
100 |
| 3 |
95 |
| 4 |
90 |
| 5 |
85 |
| 6 |
80 |
| 7 |
75 |
| 8 |
70 |
| 9 |
65 |
| 10 or more |
60 |
|
| Business Assets |
No of complete years
held |
% of gain chargeable |
| 0 |
100 |
| 1 |
50 |
| 2 or more |
25 |
|
Notes
- Transfers between husband and wife or civil partners living together are exempt.
- Capital gains are regarded as the top slice of savings income. Rates of 10%, 20% and 40% will therefore apply to gains taxed on individuals, as appropriate.
- Capital gains of all trusts are taxed at the special trust rate of 40%. Where there are several trusts created by the same settlor, the annual exemption is divided equally between them, subject to a minimum exemption of £920 (2006/07 £880) for each trust.
