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CAPITAL TAXES
Capital gains tax (CGT) rates
No changes to the current rates of CGT have been announced. This means that the rate remains at 10%, to the extent that any income tax basic rate band is available, and 20% thereafter. Higher rates of 18% and 28% apply for certain gains, mainly chargeable gains on residential properties, with the exception of any element that qualifies for Private Residence Relief.
There is still potential to qualify for a 10% rate, regardless of available income tax basic rate band, up to a lifetime limit for each individual. This is where specific types of disposals qualify for:
• Business Asset Disposal Relief (BADR). This is targeted at directors and employees who own at least 5% of the ordinary share capital in the company, provided other minimum criteria are also met. It can also apply to owners of unincorporated businesses.
• Investors’ Relief. The main beneficiaries of this relief are investors in unquoted trading companies who have newly-subscribed shares but are
not employees.
Current lifetime limits are £1 million for BADR and £10 million for Investors’ Relief.
CGT annual exemption
The CGT annual exemption will be maintained at the current level of £12,300 for 2022/23 and up to and including 2025/26.
CGT reporting and payment following a property disposal
UK resident individuals who dispose of UK residential property are sometimes required to deliver a CGT return to HMRC and make a payment on account
of CGT within 30 days of completion of the property disposal. Broadly, this only applies where the property disposal gives rise to a CGT liability and as such usually excludes the disposal of a property to which private residence relief applies.
Capital Taxes
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