New Capital Gains Tax rules from 6 April 2008

JDinho

Potentially the most problematic thing about the legislation changes is the removal of allowances on old (1982+) investments.

Currently you can use indexation & taper relief (both where applicable) to reduce the overall gain so that it is below your allowance

Today - Assuming no other gains are crystallised
Sell an asset crystallising a gain of £15,000 which you have held prior to 1998 & therefore qualifies for 40% taper relief = £9,000 chargeable gain under the current system. This is below the annual allowance of £9,200 and there is no tax to pay.

Post 06/04/08- Assuming no other gains are crystallised
Sell same asset crystallising the same gain of £15,000 but with no allowances. This would exceed the allowance (08/09 figures not yet confirmed) of £9,200 incurring a taxable gain of £5,800.


This simple example would cost a tax payer £1,044 next year.