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Capital Gains Tax

Annual exemption

  2015/16 2014/15
Individuals and deceased estates £11,100 £11,000
Most trusts 5,550 5,500

Notes

  1. Each individual is entitled to an annual exemption, but that exemption may be denied if he claims the remittance basis (see Personal Taxation).
  2. The annual exemption cannot be transferred or carried forward or back to another tax year.

Tax rate

  2015/16 2014/15
Individuals to limit of basic rate band 18% 18%
Individuals above basic rate band 28% 28%
Trusts and deceased estates 28% 28%

Notes

  1. CGT is payable on capital gains made in the tax year, after deduction of capital losses, available reliefs and the annual exemption.
  2. CGT is self-assessed, reported and paid in conjunction with Income Tax (see Personal Taxation).
  3. When a chargeable asset is given away, the donor is treated as receiving the full market value and is liable for CGT accordingly.
  4. There is no charge on disposals between spouses or registered civil partners who are living together. On such disposals, the transferee takes over the transferor's CGT cost.
  5. There is no CGT on gains accrued to the date of a taxpayer's death. Instead, the value of the estate may be subject to IHT (see Inheritance Tax).

Entrepreneurs' Relief (ER)

  2015/16 2014/15
Lifetime limit £10m £10m
CGT on qualifying disposals 10% 10%

Notes

  1. Disposals made by individual or certain trustees can qualify for ER.
  2. The asset disposed of must have been owned for at least a year and be one of:
    • a business or an interest in a business
    • business assets sold within three years of the business ceasing
    • shares in a trading company of which the individual is an officer or employee and holds at least 5% of the ordinary share capital, or acquired the shares under an EMI scheme
    • assets used by the shareholder's personal company or partnership and sold at around the same time as 5% or more of company's shares/interest in the partnership

Other CGT reliefs

Asset Conditions
Taxpayer's only or main home Gain is exempt for the periods the taxpayer lives there, or is deemed to live there, plus the last 18 months of ownership.
Chattels (tangible movable property) If bought and sold for less than £6,000.
Gifts to charity Not charged to CGT, and gifts of quoted shares and land also enjoy an income tax relief.
Assets which become of negligible value Deemed to be sold at Nil, to create loss, when an election is made.