Archive for the 'Capital Gains' Category

Capital Gains Tax (CGT): annual exempt amount (AEA) – Budget 20 March 2013

The AEA will increase by 1 per cent in 2014-15 and 2015-16. The AEA will rise

to £11,000 in April 2014 and £11,100 in April 2015. The rate of charge to CGT

remains at 18% or 28% depending on your level of income. If the asset disposed

of is a business asset then the rate of CGT may fall to 10%.

Back to Main Page – Budget 20 March 2013

Extension of the Capital Gains Tax holiday on Seed Enterprise Investments – Budget 20 March 2013

The Seed Enterprise Investment Scheme was launched in 2012 and gives a 50%

income tax relief on investments made into small, start up and fledgling (Seed)

companies. The Budget announced a limited extension of the Capital Gains Tax

(CGT) holiday to continue to encourage investors to take up the new scheme.

Any investors making capital gains in 2013-14 will receive a 50% CGT relief when

they reinvest those gains into Seed companies in either 2013-14 or 2014-15.

Back to Main Page – Budget 20 March 2013

How much of your gain are you getting?

 With increased capital gains tax rates and a maximum of 28% payable on gains, do you know how much you are actually going to get when you make a capital gains disposal?  With potential tax rates of 10%, 18% and 28% for 2010/2011 and tight rules for Entrepreneurs Relief there are several areas you can work on to increase the amount of cash that you receive after the capital gains tax payable.

By reviewing your assets before their disposal, you may be able to maximise the amount of Entrepreneurs Relief available on each disposal.  With a maximum saving available of £900,000 being proactive could save you thousands of pounds.  You can also consider the timings of disposals to ensure that you match losses available with gains and to ensure that you make all claims available to you.

You can also make negligible value claims for shareholding, which have become virtually worthless, reducing the tax payable on other gains that you have made in the year and saving you money.

It is also worth considering who owns the assets before the sale; if at all possible ownership should be split between husband and wife to ensure that both annual exemptions of £10,100 (2010/2011) are used and that the lower rates of capital gains tax are utilised by the spouse with the lower income.

The transfer of asset shares between husband and wife cam be made free of Capital Gains Tax or Inheritance Tax so should be considered before the disposal of assets to reduce the tax payable as much as possible.  Care should be taken not to  jeopardise more generous reliefs in the transfer.

Extract taken from our 2011 Bonus edition Tax newsletter – if you would like to subscribe please leave your details here.

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