Capital Gains Tax
Rate of tax and annual exemption
The rate of CGT remains 18% for those whose total taxable income and gains for the year are below £34,370, and 28% for gains which are above that figure.
The annual exempt amount for CGT is held at £10,600. The normal increase has been cancelled in order to balance the exemption offered for investment in Seed Enterprise Investment Scheme shares.
Trustees
Trustees continue to be liable to CGT at 28% after deducting half the normal annual exemption (£5,300). The annual exemption is shared between trusts set up by the same settlor since June 1978, subject to a minimum of £1,060.
Entrepreneurs' Relief (ER)
Entrepreneurs’ Relief allows certain disposals of businesses and business assets to be charged at a lower CGT rate of 10%. The lifetime limit of gains which can qualify remains £10m (the limit for disposals from 6 April 2011).
It is proposed that ER will be available for gains on shares issued under the Enterprise Management Incentive scheme. European Union approval has to be obtained for such a measure, so the details of its introduction are yet to be confirmed.