Taxing Times - Capital Gains Tax

As we breathe a sigh of relief having submitted the 2006/07 Personal Tax Returns prior to the Revenue's deadline of 31 January 2008, we take a look at Capital Gains Tax (CGT) and the possible implications of the changes announced by the Chancellor in October, and more recently amended, which are due to come into effect on 5 April this year.
From 5 April the rate of CGT on disposals of business assets will be a flat rate of 10% on gains up to £1million & 18% thereafter. On disposals of other assets the flat rate of 18% will be applied, irrespective of the amount of the gain.

Currently the amount of CGT you pay varies according to the level of income tax you pay. The gain is calculated after deduction of your annual exemption which is £9,200 per person, for 2007/08. Also applied to reduce the gain is taper relief which can eliminate up to 75% of a gain on the disposal of a business asset. Taper relief is to be removed entirely in 2008/09.

Anyone considering the disposal of a capital asset must look carefully at the timing. Some people will be better off completing a transaction before 5 April and some by delaying until afterwards.

As we breathe a sigh of relief having submitted the 2006/07 Personal Tax Returns prior to the Revenue's deadline of 31 January 2008, we take a look at Capital Gains Tax (CGT) and the possible implications of the changes announced by the Chancellor in October, and more recently amended, which are due to come into effect on 5 April this year.
From 5 April the rate of CGT on disposals of business assets will be a flat rate of 10% on gains up to £1million & 18% thereafter. On disposals of other assets the flat rate of 18% will be applied, irrespective of the amount of the gain.