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 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)
Entrepreneursí 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.