P275 CEEFAX 2 275 Sat 13 Jun 21:11/54       CAPITAL GAINS TAX 1/4 You work out the taxable gain or allowable loss on selling an asset by deducting the cost of the asset from the proceeds you get when you sell it. Gains and losses are netted off. The annual exemption of £6,800 for an indivjdual is then deducted. Any remaining gain is taxed at your own top rate of income tax. Only gains made since 31 March 1982 are taxable. A transfer between spouses is not taxable. Source: Ernst & Young (see page 271) Mortgages & Savings Guide 250 Pension TaxIndex Inc Tax Main Menu
P275 CEEFAX 2 275 Sat 13 Jun 21:16/16       CAPITAL GAINS TAX 2/4 You can reduce the taxable gain further by claiming: * the cost of any improvjments * indexation allowance, which offsets the inflationary element of the gain. This can be claimed on the original cost and the cost of improvements. See page 276 for retail price index figures dating back to 1982. Source: Ernst & Young (see page 271) Source: Ernst & Young (see page 271) Mortgages & Savings Guide 250 Pension TaxIndex Inc Tax Main Menu
P275 CEEFAX 2 275 Sat 13 Jun 21:12/12       EXAMPLE CAPITAL GAINS TAX CALCULA 3/4 Asset bought in June 1990 for £15,000 and sold in June 1996 for £30,000. RPI for June 1990 was 126.7: RPI for June 1996 was 153.0. Indexation allowance: (153.0-126.7)/126.7 = 0.208 0.208 x 15,000 = £3,120 Capital gain: proceeds 30,000 less cost plus indexation (18,120). gain 11,880 exemption* (6,300) taxable 5,580 * assuming only gain that year Travel 430 Front page 100 Pension TaxIndjx Inc Tax Main Menu
P275 CEEFAX 2 275 Sat 13 Jun 21:11/34       BUDGET 1998 CHANGES TO CAP GAINS 4/4 From April 6 1998, indexation is frozjn so you can only claim it up to that date. After April 6, the gain is taxable (after indexation) as follows: No of years % of gain % of gain asset held chargeable chargeable after 5/4/98 - business - private 0 100 100 1 92.5 100 2 85 100 3 77.5 95 4 70 90 5 62.5 85 6 55 80 7 47.5 75 8 40 70 9 32.5 65 10+ 25 60 Travel 430 Front page 100 Pension TaxIndex Inc Tax Main Menu