CW Energy LLP

Capital Gains Tax

2009/102010/11From 23 June 2011
Standard rate18%18%18%
Higher rate*n/an/a28%
Entrepreneurs'relief lifetime limit of gains£2,000,000£2,000,000£5,000,000
Annual exempt amount
Individuals etc.£10,100£10,100£10,100
Most trustees£5,050£5,050£5,050

22 July Emergency Budget

The Budget announced that, from 23 June 2010 capital gains tax will rise from 18 to 28 per cent for higher and additional rate taxpayers. The 10 per cent lifetime limit for entrepreneurs’ relief rate will be extended from the first £2 million to the first £5 million of gains made over a lifetime.

*For higher and additional rate tax payers

The capital gains tax (CGT) annual exempt amount was increased in line with statutory indexation to £10,100 for the tax year 2009-10 for individuals, personal representatives of deceased persons, and trustees of certain settlements for the disabled. The annual exempt amount for most other trustees is increased to £5,050.

Every husband, wife, civil partner, and child has his or her own £10,100 annual exempt amount.

For gains above the annual exempt amount, the CGT rate for 2010-11  will remain at 18 per cent. In addition, a new entrepreneurs’ relief will reduce the effective tax rate on some gains to 10 per cent. The Budget 2010 announced an increase in the Entrepreneurs’ Relief lifetime limit from the first £1 million to the first £2 million of qualifying gains.  the effective rate for Entrepreneurs’ Relief is 10%.

The amount chargeable to CGT is added to the individual’s income liable to income tax and treated as the top part of that total.