Budget – Capital Gains Tax

Just in case you missed the changes to Capital Gains Tax (CGT), here they are:

The most widely anticipated change was an increase to the rate of CGT, which could have resulted in a maximum CGT rate of 40% or possibly 50%. To the relief of many, this change did not materialise, the Chancellor instead opting for a 10% increase in the rate of CGT for higher rate income taxpayers.

From 23 June 2010:

• the main rate of CGT for those who pay income tax at the basic rate or below will remain at 18%. For those individuals whose income and gains exceed the higher rate tax threshold, the main rate of CGT will be increased to 28%; and
• the lifetime limit on gains that qualify for entrepreneurs’ relief will be increased by £3million to £5 million.

In addition:

• the annual CGT exemption for individuals will remain at £10,100; and
• neither indexation allowance nor taper relief will be available to reduce chargeable gains.