Capital Gains Tax applies to the disposal or transfer of chargeable assets, such as property and investments and includes capital sums derived from assets.

The capital gain is calculated by deducting from the sale proceeds, the purchase costs, certain other expenses and tax reliefs due. The resulting gain is charged at the Capital Gains Tax rate. For the year 2011/12, Capital Gains Tax rate is currently 18% standard rate, but this is subject to future Budget changes.

For gains accrued by the sale of a business, it may be possible to claim 'entrepreneur's relief' on gains of up to £2,000,000 to reduce the effective tax rate to 10%.

Individuals may claim an annual exemption deduction (2010/11 - £10,100 and 2011/12 - £10,600). However, it should be appreciated that Companies are not able to claim this exemption.

Transfers of assets between spouses and civil partners are not chargeable to Capital Gains Tax and death is not regarded as an occasion of charge for capital gains tax purposes. Transfers of chargeable assets between certain family members or 'connected persons' are deemed to be at their market value for the purposes of a Capital Gains Tax computation.

This is a complex subject, especially in regard to let property, and it is advisable to seek the assistance of a Tax Advisor. We are able to relate to you and help guide you in the right direction..

Please call Pilbro on 01280 820 654 for more information and to arrange a consultation.