New Capital Gains Tax rules from 6 April 2008

mroller

does this mean that all capital gains are tax free up to 9200£ (like before) and then taxable at 18%?

Aegis

mroller wrote: »

does this mean that all capital gains are tax free up to 9200£ (like before) and then taxable at 18%?

That would appear to be the case, yes

EdInvestor

The fall in CGT from 40% to 18% looks very bad news for IBs.

http://www.citywire.co.uk/Blogs/BrokerConsultants/Entry.aspx?VersionID=97366


What with the end of the IHT gravey train, this is a terrible PBR for the advisor/legal fraternity.:cool:

StevieJ

BorisTheSpider wrote: »

Rubbish, you'd have to have held for 10 years to get indexation allowance, and the maximum taper relief works out at 24%.
Any BTLers would be better off waiting until next April to sell, when they get a nice tax cut on their speculation.

http://www.citywire.co.uk/News/NewsArticle.aspx?VersionID=97374&MenuKey=News.Home

This article quotes a rate of 10% due to taper relief if asset held for held for two years.

Aegis

That would be for commercial assets.

Jon211

BorisTheSpider wrote: »

Rubbish, you'd have to have held for 10 years to get indexation allowance, and the maximum taper relief works out at 24%.
Any BTLers would be better off waiting until next April to sell, when they get a nice tax cut on their speculation.

That's not how taper relief works.
You don't get charged at 60% of the 40% tax level if you've had the asset for 10 years.

The taxable value is reduced to 60% of the capital gain.

So, you acquired an asset 10 years ago for £10K
It is now worth £25K.
This is a £15K capital gain, but the taper relief takes the taxable capital gain to 60% * £15K, i.e. £9K.

This is below the threshold for tax so you would pay no CGT on this.

Your post makes it sounds as though you would pay 24% tax on the £15K capital gain.

I need to work out exactly how this will affect me.
I have several unit trusts purchased before 1998 that will be eligible for indexation allowance and taper relief.

I think I can sell just about all of them at the moment without incurring CGT but will need to do some calculations.

StevieJ

Aegis wrote: »

That would be for commercial assets.

I would have thought that BTL were commercial assets if run as a Limited company, I accept your point that it appears that properties are excluded.

Aegis

StevieJ wrote: »

I would have thought that BTL were commercial assets if run as a Limited company, I accept your point that it appears that properties are excluded.

I didn't think I was making a point, but thanks for accepting whatever point I made!

ManAtHome

At least it's taken attention away from the latest NuLab pension grab http://www.thisismoney.co.uk/retirement/article.html?in_article_id=425185&in_page_id=6

Tiggs_2

EdInvestor wrote: »

http://www.citywire.co.uk/Blogs/BrokerConsultants/Entry.aspx?VersionID=97366


What with the end of the IHT gravey train, this is a terrible PBR for the advisor/legal fraternity.:cool:

Its a pity that the media is giving the impression that something significant has happened to the IHT allowance. I can see why people like Ed are confused on this issue so goodness knows what the public at large make of it.

IHT has NEVER been payable by married couples with assets up to £600k. All thats ended is the need for expensive Will planning (bad news for Will writers) The "IHT market" is one that exits for people with assets over £600k and theres no change there.

Quite important that those who have an IHT liability dont think that they are in any real way improved by the change in rules.