Capital taxes

Capital Gains Tax (CGT)

The annual exempt amount for 2011/12 is £10,600.

Gains that fall within an individual’s otherwise unused basic rate income tax band are taxed at 18%; any remaining gains above the basic rate band limit are taxed at 28%. The rate of CGT for trustees or personal representatives is 28%.

Entrepreneurs' Relief

Qualifying gains are taxed at 10%. The lifetime limit for Entrepreneurs’ Relief rises from 6 April 2011 to £10 million. The increased limit applies only to qualifying disposals on or after that date.

Inheritance tax (IHT)

The IHT threshold is frozen at £325,000 until 5 April 2015.

The rate of IHT remains 20% for lifetime transfers and 40% for death estates (including transfers within seven years before death brought back into the estate for the purpose of calculating the tax due at death).

A reduced rate of 36% will apply from April 2012 to death estates, where 10% or more of the net estate is left to charity.

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