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Capital Gains Tax
| Capital gains tax rates and bands are as follows: | | | 2006/07 | 2005/06 | | Taxed as top slice of savings income | | | | Annual exemption | | | | - individual | £8,800 | £8,500 | | - settlement(s) (spread over total number) | £4,400 | £4,250 | | Transfers between husband and wife living together are exempt | | | | Chattels exemption | | | | (proceeds per item or set) | £6,000 | £6,000 |
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Taper ReliefFor gains realised after 5 April 1998 by individuals or trustees, indexation allowance is frozen and the gain reduced by a tapering relief. The value of the taper relief depends on whether or not the asset is a business asset, and on the number of complete years the asset has been held after 5 April 1998 (with an additional "bonus" year for non-business assets held on 16 March 1998).
| Non-Business Assets | No. of complete years
held after 5 April 1998 | % gain chargeable | | 1 | 100 | | 2 | 100 | | 3 | 95 | | 4 | 90 | | 5 | 85 | | 6 | 80 | | 7 | 75 | | 8 | 70 | | 9 | 65 | | 10 or more | 60 |
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| Business Assets | No of complete years
held | Disposals | | % of gain chargeable | | 0 | 100 | | 1 | 50 | | 2 or more | 25 |
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Notes - Transfers between husband and wife or civil partners living together are exempt.
- Capital gains are regarded as the top slice of savings income. Rates of 10%, 20% and 40% will therefore apply to gains taxed on individuals, as appropriate. Gains taxed on trustees are usually taxed at the special trust rate of 40%.
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