Capital Gains Tax changes

What was announced?

There is to be a reduction in the 18 per cent rate of CGT to 10 per cent and the 28 per cent rate of CGT to 20 per cent for chargeable gains, except in relation to chargeable gains accruing on the disposal of residential property (that do not qualify for private residence relief), and carried interest.

These changes will affect individuals, trusts and personal representatives who pay CGT.

This measure will have effect for relevant gains accruing on or after 6 April 2016.

Provisions will make clear that a person can use any unused income tax basic rate band in the most beneficial way.

What does it mean?

The rates for CGT in 2015/16 are:

  • 18 per cent for individuals where total taxable gains and income are less than the upper limit of the basic rate band (£31,785 + £10,600 = £42,385)
  • 28per cent for individuals in respect of gains (or any part of gains) above that limit
  • 28 per cent for trustees and personal representatives

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