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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

1. Transfers between husband and wife or civil partners living together are exempt.
2. 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.
3. 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.
   
   
   
   
   
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