Capital Gains Tax Roundups

There are still a number of special reliefs and allowances that will encourage taxpayers to organise their tax affairs so that gains are taxed under the capital gains tax rules rather than as income.

There is no indication that George Osborne will make any radical changes to CGT in the March Budget 2012. Here's a quick summary of the main rates and reliefs prior to the 2012 Finance Bill.

  1. Gains taxed at flat rate of 18% or 28% depending on the amount of your other sources of income.
  2. The 2011-12 annual exemption is set at £10,600. You can make gains up to this amount and pay no tax.
  3. There are a number of gains that are exempt from CGT. They include: Assets sold for less than £6,000 (eg: antiques and paintings), wasting assets (eg: cars and wine), stocks and shares held in an ISA account, National savings certificates and premium bonds, winnings from betting, lottery or the pools, compensation for personal injury, qualifying enterprise investment schemes.
  4. Individuals do not have to pay CGT on the sale of their main residence although this general principal can be overruled if the property has been let. Complications may also arise if part of a garden is sold.
  5. Home owners who let out all or part of their house may not benefit from the full main residence relief but can benefit from lettings relief. The maximum amount of this relief will be the lower of £40,000, the amount of main residence relief due, or the amount of gain made on the let part of the property.
  6. When a business is sold an individual's shares in a trading company or interest in a trading partnership will often enable them to claim entrepreneurs' relief. Where entrepreneurs' relief is available gains are taxed at 10% rather than the normal rate of 28%.

For more information contact Nigel Holmes
Disclaimer – Please note: The ideas shared with you in this article are intended to inform rather than advise. Taxpayers’ circumstances do vary and if you feel that tax strategies we have outlined may be beneficial it is important that you contact us before implementation. If you do or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.


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