Tax Data
Spring 2009
Capital Gains Tax
| The chargeable gains of the tax year, after deduction of capital losses, available reliefs and the annual exemption, are taxed at 18%. CGT is self-assessed, reported and paid in conjunction with income tax and the details are given on the Personal Taxation page. When a chargeable asset is given away, the doner is treated as receiving the full market value and is liable for CGT accordingly. | ||
| Entrepreneurs' Relief | ||
| Disposals of the following assets may qualify for ER if they have been owned for at least a year: * a business or an interest in a business * shares in a company for which the individual works and holds 5% of the share capital * related assets used in the business/company and sold at the same time as the interest in the business/shares An individual will qualify for relief on all disposals until the lifetime total of such gains reaches £1m. The first £1m of gains will be reduced by 4/9, giving an effective CGT rate of 10% instead of 18%. | ||
| Other major CGT reliefs | ||
| A number of types of asset are exempt from CGT, including chattels (tangible movable property) which are bought and sold for less than £6,000; cars; and the taxpayer's only or main residence. A taxpayer with more than one residence can choose which is to be exempt, but it is not possible to apply the exemption to an investment property which is rented out. | ||
| Gifts to charity are not charged to CGT, and gifts of quoted shares and land also enjoy an income tax relief (see Personal Taxation). | ||
| Deferral of gains is allowed on some types of reinvestment, such as subscription for new EIS shares (see Investment Reliefs). | ||
| There is no CGT on transfers between spouses or registered civil partners, whether gifts or for consideration. The transferee takes over the transferor's CGT cost. | ||
| There is no CGT on gains accrued to the date of a taxpayer's death. Instead, the value of the estate may be subject to IHT. |