Capital Gains Tax

A capital gain arises when certain capital (or 'chargeable') assets are sold at a profit. The gain is the sale proceeds (net of selling costs) less the purchase price (including acquisition costs). The taxation of capital gains was significantly revised from 6 April 2008 and then again from 23 June 2010.

What are the main features of the current system?

• For chargeable gains arising on or after 23 June 2010 capital gains tax (CGT) at the rate of 18% applies to gains (including any held over gains coming into charge on or after this date) where net total taxable gains and income is below the income tax basic rate band (2011/12 £35,000). Gains or any parts of gains above this limit will be charged at 28%. Gains that arose in 2010/11, but before 23 June 2010, were liable to CGT at 18% and were not taken into account in determining the rate(s) at which gains arising on or after 23 June 2010 were charged.
• Entrepreneurs' relief may be available on certain business disposals.

For any gains that arose between 6 April 2008 and 22 June 2010 (including held over gains coming into charge between these dates), the chargeable gain was liable to tax at 18%, after deducting allowable losses, any other reliefs and the annual exemption.