Capital Gains Tax 2019/20
Annual Exempt Amount (AEA)
|Individuals and deceased estates||£12,000||£11,700|
- Each individual is entitled to an AEA, but that exemption may be denied if they claim the remittance basis (see Personal Taxation).
- The AEA cannot be transferred, nor carried forward or back to another tax year.
|2019/20 & 2018/19|
|Individual – to limit of basic rate band||18%||10%|
|Individual – above basic rate band||28%||20%|
|Trusts and deceased estates||28%||20%|
- CGT is payable on capital gains made in the tax year, after deduction of capital losses, available reliefs and the annual exemption.
- Receipts of carried interest by venture capital investors are taxed at the same rates as residential property.
- When a chargeable asset is given away, the donor is treated as receiving the full market value and is liable for CGT accordingly.
- There is no charge on disposals between spouses or registered civil partners who are living together. On such disposals, the transferee takes over the transferor’s CGT cost.
- There is no CGT on gains accrued to the date of a taxpayer’s death.
Entrepreneurs’ Relief (ER)
|CGT on qualifying disposals||10%||10%|
- Disposals made by an individual or certain trustees can qualify for ER.
- The asset disposed of must have been owned for at least two years and be one of:
- a business or an interest in a business
- business assets sold within three years of the business ceasing
- shares in a trading company, of which the individual is an officer or employee and either holds at least 5% of the ordinary share capital or acquired the shares under an EMI scheme; other detailed conditions apply
- assets used by the shareholder’s personal company or partnership and sold at around the same time as 5% or more of either the company’s shares or the partnership interest.
- This relief gives a 10% CGT rate to certain investors in qualifying unquoted trading companies.
- Investors cannot be a paid director or employee of the company (but can become an employee 6 months or more after acquiring the shares) and must hold newly issued shares (acquired on/after 17 March 2016) for a minimum period of 3 years beginning on/after 6 April 2016. Thus the earliest date on which a qualifying disposal can be made is 6 April 2019.
Other CGT reliefs
|Taxpayer’s only or main home||Gain is exempt for the periods the taxpayer lives there, or is deemed to live there, plus the last 18 months of ownership.|
|Chattels (tangible movable property)||If bought and sold for less than £6,000.|
|Gifts to charity||Not charged to CGT, and gifts of quoted shares and land also enjoy an income tax relief.|
|Assets which become of negligible value||Deemed to be sold at nil, to create loss, when an election is made.|