|
|
|
|
|
CAPITAL GAINS TAX |
|
Rates See ¶6043, ¶ 6331 Two major changes are to be implemented, effective from 23 June 2010. Firstly, a new capital gains tax rate of 28% will apply to the higher rate gains. In essence, where the total of an individual’s gains, after the annual exemption and any losses, and income, after the personal allowance, would take them above the upper limit of the basic rate band for the year, the gain will be taken as the top slice and the amount falling above this limit will be taxed at the new rate. The existing rate will apply for all gains below this limit. The new rate will also apply for trustees and personal representatives regardless of the level of income or gains. Gains that have already occurred this tax year will remain to be taxed at 18% and will not be accounted for in ascertaining if the basic rate threshold has been exceeded. Secondly, entrepreneurs’ relief will be further extended to cover lifetime gains of £5 million. This will not affect gains made in the current tax year arising prior to 23 June 2010. The legislation will also be amended so that a flat rate of 10% is charged on eligible gains rather than reducing the gain by a fractional amount as is currently the case. AS PREVIOUSLY ANNOUNCED Adult placement carers See TM ¶6170 On the disposal of a taxpayer’s principal private residence (PPR) any area set aside exclusively for the purposes of a trade or similar will not attract PPR relief, leaving part of any gain made left to charge. Under a government scheme, Shared Lives, carers may be required to set aside a room for an adult to stay with them. Where this is the case, for disposals after 9 December 2009 the relief will be not be restricted for that room |
