Capital Gains Tax
| CGT Aspect | Planning Comments |
|---|---|
| Annual exemption (9,600 for 2008/09) | This should be used year by year as there is no carry forward of unused exemptions |
| Losses | Consider sale of assets to crystallise losses to set against gains (see above Losses’ slot) |
| Disposals | Sales are the commonest form of disposal but you can make also a disposal for CGT by giving away, exchanging, losing or destroying part or all of an asset. Consider making disposal with a view to crystallising capital losses before year-end, or to defer disposal post-5 April and defer liability on gain. |
| Entrepreneurs’ relief | Commenced on 6 April 2008 Given generally where an individual sells all or part of his trading business Available to trustees in some circumstances First 1 million of gains will be charged to CGT at only 10% Relevant conditions must be met for one year prior to disposal Gain is reduced 4/9ths, and then charged to CGT at 18% (to give effective rate of 10%) First 1 million of gains will be a cumulative lifetime limit although disposals on or before 5 April 2008 do not affect this limit |
| Capital gains for Individuals | Ignore cost for assets held pre-31 March 1982 Instead use 31 March 1982 (market) value |
| Transfer of assets Between husband & wife & civil partners | No CGT liability as long as parties are living together at some time in the tax year (you are considered living together unless legally separated and separation is likely to become permanent) |
| Main or private residence relief | General exemption for gain on the sale of your main home although circumstances in which liability may arise should be noted |
| Enterprise Investment Scheme (EIS) relief | CGT deferral for reinvested gains |
| Venture Capital Trusts | As for EIS above |