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Capital Gains Tax (CGT) - is a tax on the profit when you sell or dispose of something that has increased in value.

Capital Gains Tax allowances - You only have to pay capital gains tax on your overall gains above your tax-free allowance (called the Annual Exempt Amount). Capital gains tax rates of 10% and 20% introduced for disposals on or after 6 April 2016 do not apply to transactions involving residential property. Capital gains tax rates for these transactions remain at 18% and 28%.

TAX RATES - INDIVIDUALS 2017/18 2018/19 2019/20
Standard rate 10% 10% 10%
Higher rate 20% 20% 20%
Standard rate for gains on residential property 18% 18% 18%
Higher rate for gains on residential property 28% 28% 28%
Annual Exempt Amount
Individuals £11,300 £11,700 £12,000
  • Entrepreneurs’ relief (ER)

    Entrepreneurs’ relief (ER) - may be available for certain business disposals taking place on or after 6 April 2008 and has the effect of charging the first £10 million (from 6 April 2011) of gains qualifying for the relief at an effective rate of 10%.

    The relief will apply to gains arising on a disposal of:

    • the whole, or part, of a trading business that is carried on by the individual, either alone or in partnership in the 12 months prior to sale
    • shares in an unquoted trading company, or holding company of a trading group, provided that the individual owns broadly a 5% shareholding (of the ordinary share capital and voting rights and, from disposals on or after 29 October 2018, to 5% of distributable profits and net assets upon winding up) 12 months prior to sale and has also been an officer or employee of the company in that time
    • assets used by a business or a company which has ceased within the last three years
    • assets used in a partnership or by a company but owned by an individual, if the assets disposed of are ‘associated’ with the withdrawal of the individual from participation in the partnership or the company.

    From 6 April 2019 the 12 month holding requirements stated above will be increased to 24 months.

    A trading business includes professions but only includes a property business if it is a ‘furnished holiday lettings’ business.

    Restrictions on obtaining the relief on an ‘associated disposal’ are likely to apply in certain specific situations. This includes the common situation where a property is in personal ownership but is used in an unquoted company or partnership trade in return for a rent. Under ER the availability of relief is restricted where rent is paid.

  • Business asset rollover relief and Gift Hold-Over relief

    Business asset rollover relief - You may be able to delay paying Capital Gains Tax if you:

    • dispose of some business assets
    • use all or part of the proceeds to buy new assets

    Business Asset Rollover Relief means you won’t pay any tax until you sell the new asset. You may then need to pay tax on the gain from the original asset.

    You can also claim:

    • provisional relief if you’re planning to buy new assets with your proceeds but haven’t done yet
    • relief if you use the proceeds to improve assets you already own

    Gift Hold-Over Relief - You may be able to claim Gift Hold-Over Relief if you give away business assets (including certain shares) or sell them for less than they’re worth to help the buyer. Gift Hold-Over Relief means:

    • you don’t pay Capital Gains Tax when you give away the assets
    • the person you give them to pays Capital Gains tax (if any is due) when they sell (or ‘dispose of’) them

    Tax isn’t usually payable on gifts to your husband, wife, civil partner or a charity.

    Eligibility - The conditions for claiming relief depend on whether you’re giving away business assets or shares.

Rates & Allowances Pages ► Income Tax Rates & AllowancesCapitlal Gains TaxPensions

Registered office: 61 Friar Gate, Derby, Derbyshire, DE1 1DJ

Adrian Mooy & Co is the trading name of Adrian Mooy & Co Ltd.  Registered in England No. 05770414

Registered to carry out audit work by the Association of Chartered Certified Accountants - auditregister.org.uk 8011438

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