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| Tax Rates | Capital Gains | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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The following CGT rates apply.
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| CGT relief | 2005/2006 | 2003/2004 |
|---|---|---|
| Annual exemption for individuals | £8,500 | £8,200 |
| Chattels proceeds exemption | £6,000 | £6,000 |
Taper relief
For individuals, gains on capital disposals benefit from indexation allowance up to 5 April 1998. After this date, gains are reduced by taper relief reflecting the number of complete years after 5 April 1998. Non-business assets acquired before 17 March 1998 qualify for a bonus year of taper relief. From 6 April 2000 the holding period required to receive maximum taper relief for business assets is four years and for non-business assets is ten years.
| Years | Percentage of gain chargeable | |
|---|---|---|
| Business assets | Non business assets | |
| 0 - 1 | 100% | 100% |
| 1 - 2 | 50% | 100% |
| 2 - 3 | 25% | 100% |
| 3 - 4 | 25% | 95% |
| 4 - 5 | 25% | 90% |
| 5 - 6 | 25% | 85% |
| 6 - 7 | 25% | 80% |
| 7 - 8 | 25% | 75% |
| 8 - 9 | 25% | 70% |
| 9 - 10 | 25% | 65% |
| 10+ | 25% | 60% |
Retirement relief
Retirement relief is available for a material disposal of business assets by an individual who at the time of making the disposal is either aged:
- over 50, or
- under 50 but retiring because of ill-health (evidence is required by the Inland Revenue).
The maximum relief is the full lower limit plus half of the gain between the upper and lower limit. (i.e. for 1999/00 the maximum relief would be £200,000 plus 50% of the gain between £200,000 and £800,000).
| Retirement relief | Lower limit | Upper limit |
|---|---|---|
| 1999/2000 | £200,000 | £800,000 |
| 2000/2001 | £150,000 | £600,000 |
| 2001/2002 | £100,000 | £400,000 |
| 2002/2003 | £50,000 | £200,000 |
From 2003/2004 retirement relief is abolished.
Taper relief is applied to a gain after applying retirement relief.
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