Tax Card

From 1 April 2008

Capital Gains Tax will be charged at a Standard Rate of 18%.

Entrepreneur's Relief gives an effective rate of 10% on gains up to £1 million. It is available in respect of gains made on: the disposal of a business; gains made on the disposal of all or part of a business; gains made on the disposal of assets following the cessation of a business; or gains made by certain individuals involved in the running of a business.

Prior to 1 April 2008

The amount chargeable to CGT is added onto the top of income liable to income tax for individuals and is charged to CGT at the following rates:
- below the starting rate limit at 10%
- between the starting rate and standard rate limits at 20%, and
- above the basic rate limit at 40%.
For individuals, gains on disposals after 5 April 1998 benefit from indexation relief up to that date. Gains are reduced by taper relief reflecting the number of complete years after 5 April 1998. Non-business assets acquired before 17 March 1998 qualify for a bonus year of taper relief.

The holding period required to receive maximum taper relief for business assets is two years, and for non-business assets is ten years.

Years held after 5/4/98	Relief available to 31 March 2008 Based on the percentage of gain chargeable to CGT
	Business asset	Non-Business asset
0	100%	100%
1	50%	100%
2	25%	100%
3	25%	95%
4	25%	90%
5	25%	85%
6	25%	80%
7	25%	75%
8	25%	70%
9	25%	65%
10	25%	60%

Tapering relief is given in respect of gifts made between three and seven years before death.
Where tax is payable on lifetime gifts (other than those taxable only because they are made within seven years of death), tax is charged at 20%.

Disadvantaged Area Relief for non-residential land transactions ended on 17 March 2005.

When calculating the duty payable on the Net Present Value of the lease, you must reduce the NPV calculation by either the £125/150K band before applying the 1% rate.