Budget Report 24 March 2010

Capital Taxes

Capital gains tax	2010/11	2009/10
Capital gains tax rate	18%	18%
Entrepreneurs' relief:
Effective rate	10%	10%
Lifetime limit	£2,000,000	£1,000,000
Annual exemption:
Individual	£10,100	£10,100
Settlement	£5,050	£5,050

 

 

Inheritance tax	2010/11	2009/10
Nile rate band	£325,000	£325,000
Chargeable rate on lifetime transfers	20%	20%
Rate on transfers on or within 7 years of death	40%	40%

 

Capital gains tax: increase in lifetime limit on entrepreneurs’ relief

Legislation will be introduced in Finance Bill 2010 to increase the lifetime limit on gains qualifying for entrepreneurs’ relief from £1 million to £2 million. The change will have effect from 6 April 2010.

Gains qualifying for the relief will continue to be reduced by the fraction 4/9, leaving the effective rate of capital gains tax at 10 per cent on the first £2 million of gains. Any gains in excess of that figure will be subject to capital gains tax at the rate of 18 per cent.

Inheritance tax: nil rate band

The 2009 Pre Budget Report announced that the inheritance tax nil rate band would be frozen at the current level of £325,000 for the 2010/11 tax year.

It has been announced that the nil rate band will remain at £325,000 until 5 April 2015.

 

© 2012 McAllen and Co | Capital taxes

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