HM Treasury’s United Kingdom Budget 2005

brought to you courtesy of Grant Thornton


brought to you courtesy of Grant ThorntonCapital gains tax

Rates

  • individuals charged at 10%, 20% or 40% depending on their marginal rate of tax
  • all trusts charged at 40%
 
2005/2006
2004/2005
Annual exemptions
£
£
individuals and personal representatives
8,500
8,200
trusts for disabled persons
8,500
8,200
other trusts*
4,250
4,100

* Reduced pro-rata if more than one trust per settlor subject to minimum of 10% of full amount

 
2005/2006
2004/2005
Chattels exemption
£
£
maximum proceeds
6,000
6,000

Indexation allowance

  • frozen after April 1998 for individuals and trusts
  • not available for assets acquired by individuals and trusts after 31 March 1998

Losses

Relief available for

  • capital losses of the same tax year and those brought forward
  • trading losses of same and following tax year

Taper relief

Gains on business assets*

Number of complete years for which asset held
Equivalent % rate for
taxpayers at
% of gain chargeable
higher rate
lower rate
starting rate
Less than 1
100
40
20
10
1
50
20
10
5
2 or more
25
10
5
2.5
         

Gains on non-business assets

Number of complete years after 5 April 1998 for which asset held
Equivalent % rate for
taxpayers at
% of gain chargeable
higher rate
lower rate
starting rate
Less than 3
100
40
20
10  
3
95
38
19
9.5
4
90
36
18
9   
5
85
34
17
8.5
6
80
32
16
8   
7
75
30
15
7.5
8
70
28
14
7   
9
65
26
13
6.5
10 or more
60
24
12
6   

* The definition of business assets is complex and advice should be sought on asset classification

Assets held on 17 March 1998 are deemed to have been held for one year at 5 April 1998 for the purposes of this relief

The figures shown here are subject to ammendment as the Finance Bill passes through Parliament.

This information has been prepared only as a topical guide to tax and personal financial matters. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material contained in this publication.

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