|
Capital Gains Tax
| Capital gains tax rates and bands are as follows: |
| |
2003/04 |
2002/03 |
| Taxed as top slice of savings income |
|
|
| Annual exemption |
|
|
| - individual |
£7,900 |
£7,700 |
| - settlement |
£3,950 |
£3,850 |
| Transfers between husband and wife living together are exempt |
| |
| Chattels exemption |
|
|
| (proceeds per item or set) |
£6,000 |
£6,000 |
| |
| Retirement relief |
|
|
| - exempt, first |
£n/a |
£50,000 |
| - 50% exempt, next |
£n/a |
£150,000 |
|
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 assets held on 16 March 1998).
No. of complete years
after 5 April 1998 |
Business assets
% of gain chargeable |
Other assets
% gain chargeable |
| 0 |
|
|
| 1 |
92.5 |
100 |
| 2 |
85 |
100 |
| 3 |
77.5 |
95 |
| 4 |
70 |
90 |
| 5 |
62.5 |
85 |
| 6 |
55 |
80 |
| 7 |
47.5 |
75 |
| 8 |
40 |
70 |
| 9 |
32.5 |
65 |
| 10 or more |
25 |
60 |
|
For taper relief on the disposal of business assets only
after 5 April 2000 the "bonus" year was withdrawn, but the
rate of taper relief was accelerated:
No. of complete years
after 5 April 1998 |
Business assets
% of gain chargeable |
| |
Disposals
6/4/00 - 5/4/02 |
Disposals
6/4/02 onwards |
| 0 |
100 |
100 |
| 1 |
87.5 |
50 |
| 2 |
75 |
25 |
| 3 |
50 |
25 |
| 4 |
25 |
25 |
|
Notes
- Transfers between husband and wife living together are exempt.
- 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. Gains taxed on trustees are usually taxed at the special trust rate of 34%.
|
