Capital Gains Tax rates
The following CGT rates apply.
| CGT rates | 2007/2008 | 2006/2007 |
|---|---|---|
| Chargeable gains within starting rate band | 10% | 10% |
| Chargeable gains within basic rate band | 20% | 20% |
| Chargeable gains within higher rate band | 40% | 40% |
Capital Gains Tax relief
The following types of relief are available to CGT.
| CGT relief | 2007/2008 | 2006/2007 |
|---|---|---|
| Annual exemption for individuals | £9,200 | £8,800 |
| Annual exemption for Trusts | £4,600 | £4,400 |
| Chattels proceeds exemption | £6,000 | £6,000 |
Taper relief
For individuals, gains on capital disposals benefit from indexation allowance up to 5 April 1998. After this date, gains are reduced by taper relief reflecting the number of complete years after 5 April 1998. Non-business assets acquired before 17 March 1998 qualify for a bonus year of taper relief. From 6 April 2000 the holding period required to receive maximum taper relief for business assets is four years and for non-business assets is ten years.
| Years | Percentage of gain chargeable | |
|---|---|---|
| Business assets | Non business assets | |
| 0 - 1 | 100% | 100% |
| 1 - 2 | 50% | 100% |
| 2 - 3 | 25% | 100% |
| 3 - 4 | 25% | 95% |
| 4 - 5 | 25% | 90% |
| 5 - 6 | 25% | 85% |
| 6 - 7 | 25% | 80% |
| 7 - 8 | 25% | 75% |
| 8 - 9 | 25% | 70% |
| 9 - 10 | 25% | 65% |
| 10+ | 25% | 60% |
Retirement relief
Retirement relief is available for a material disposal of business assets by an individual who at the time of making the disposal is either aged:
- over 50, or
- under 50 but retiring because of ill-health (evidence is required by HM Revenue & Customs).
The maximum relief is the full lower limit plus half of the gain between the upper and lower limit. (i.e. for 1999/00 the maximum relief would be £200,000 plus 50% of the gain between £200,000 and £800,000).
| Retirement relief | Lower limit | Upper limit |
|---|---|---|
| 1999/2000 | £200,000 | £800,000 |
| 2000/2001 | £150,000 | £600,000 |
| 2001/2002 | £100,000 | £400,000 |
| 2002/2003 | £50,000 | £200,000 |
From 2003/2004 retirement relief is abolished.
Taper relief is applied to a gain after applying retirement relief.
This page was last reviewed on 16 April 2007. The information may not reflect changes in legislation made after this date.
This is only a guide to your tax position and should not be relied on in place of professional accounting or tax advice. Any calculated figures are illustrative and are based on the data you provided.
