HM Treasury’s United Kingdom Budget 2007

Grant Thornton

Grant Thornton

Capital gains tax

Rates

  • Individuals charged at 10%, 20% or 40% depending on their marginal rate of tax
  • Trusts charged at 40%

Annual Exemptions

  2007/2008 2006/2007
  £ £
Individuals and personal representatives 9,200 8,800
Trusts for disabled persons 9,200 8,800
Other trusts1 4,600 4,400

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

  2007/2008 2006/2007
Chattels exemption £ £
maximum proceeds 6,000 6,000

Other main exemptions

  • Principal private residence.
  • Treasury stock and qualifying corporate bonds.
  • Shares in enterprise investment scheme companies, venture capital trusts, personal equity plans, individual savings accounts or child trust funds.
  • Passenger vehicles.
  • Certain gifts of assets to charities.

Indexation allowance

  • Frozen after 5 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 assets2

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

Gains on non-business assets

Number of complete years after 5 April 1998 for which asset held3 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   

2 The definition of business assets is complex and advice should be sought on asset classification.
3 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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