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Standard and higher rates of capital gains tax (CGT) together with the annual exemption. The special rate of CGT and the limit applying for entrepreneurs’ relief purposes.
Capital Gains Tax (CGT) is payable by individuals, trustees and 'personal representatives' (PRs). Companies pay corporation tax on their capital gains.
There are annual tax free allowances (the 'annual exempt amount') for individuals, trustees and PRs. Companies do not have an annual exempt amount.
For individuals net gains are added to 'total taxable income' to determine the appropriate rate of tax. The standard rate applies only to the net gains which, when added to total taxable income do not exceed the 'basic rate band'.
Gains which qualify for 'Investors' Relief' are charged at 10% for the first £10m of qualifying gains.
Gains which qualify for 'Business Asset Disposal Relief' are charged at 10% for the first £1 million.
The higher rate applies to higher rate and additional rate taxpayers.
Gains accruing on the disposal of certain residential property and arising on carried interest can attract a standard rate of 18% or a higher rate of 28% for individuals and of 28% for Trusts and Personal Representatives.
23 Mar 2022
Tax expert, Debbie Franklin, provides a summary of the announcements by Rishi Sunak on Wednesday 23 March 2022.