Capital Gains Tax: forthcoming changes - December 2007
The Government have announced that they are to introduce new legislation in the 2008 Finance Bill for the taxation of Capital Gains. Individuals, trustees and personal representatives with a gain which is chargeable to capital gains tax (CGT) may be affected. Companies that are liable to corporation tax in respect of their chargeable gains are not affected by any of the changes.
The new legislation will give effect to a new single rate of Capital Gains Tax chargeable at 18%. A number of other changes to simplify the Capital Gains Tax rules will also be made, including the withdrawal of taper relief, indexation allowance and some other possible relief's. Share identification rules are also to be simplified.
The individual annual exempt amount will remain. The current level for 2007/08 is £9,200 for individuals and £4,600 for some trustees. The exempt amount for next year (2008/09) has not yet been announced.
The new rules will affect disposals made on or after 6th April 2008.
Any clients considering making any disposals in the forthcoming months for example selling their businesses, property or significant share-holdings should seek advice from us before any decisions are made. It may be necessary to calculate the potential liability to consider the best time to make a disposal. Further changes may yet be announced by the Government relating to other new reliefs becoming available, which would affect the final Capital Gains Tax liability.
Please do not hesitate to contact us should you require any advice in this area.
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