Capital Gains Tax

A capital gain will arise when a person disposes of a capital asset at a profit. Profit is the excess of proceeds over cost.

In order to make use of the maximum benefit of the annual exemption and taper relief, there is a series of issues to take into consideration:

• the ownership period of the asset
• the amount of gain
• the type of asset: a business asset or a private asset
• capital losses relief

The rates at which the gain on the sale of the asset will be charged are 18%. Prior to 6 April 2008 they were 10%, 20% and 40% as appropriate.

The annual exemption for 2009/2010 is £10,100.

Capital Gain Tax is due and payable on 31 January following the tax year of the disposal.