Savings, Money, Finance, Specialist

Capital Gains Tax

CGT is charged on net gains on disposal, eg. a chargeable gains realised during a tax year after deducting total allowable losses realised in the year.

Disposal of assets
CGT can only arise on the disposal of an asset. Normally this means sale or transfer, but it could also mean gift or compensation for loss or damage to the asset.

Deductions
Certain costs are allowable in computing chargeable gains:

The purchase cost or market value on 31 March 1982 (if the asset was acquired before that date).
Costs of acquiring and disposing of the asset.
Expenditure on enhancing the asset's value.
Indexation allowance (see Capital Gains Tax: Indexation allowance).

**Capital Gains Tax: Individuals and Trustees**
Annual exempt amount	2004-05 (£)	2005-06 (£)	2006-07 (£)
Individuals etc*	8 200	8 500	8 800
Other trustees	4 100	4 250	4 400

* Individuals, trustees of settlements for the disabled, and personal representatives of the estate of a deceased person.

The amount chargeable to CGT is added onto the top of income liable to income tax for individuals and is charged to CGT at these rates:

below the starting rate limit at 10%,
between the starting rate and basic rate limits at 20%,
and above the basic rate limit at 40%.

Indexation allowance

You are not entitled to indexation allowance for any period after April 1998. To calculate indexation allowance up to April 1998 on disposals on or after 6 April 1998, use the table below.

You work out the indexation allowance by multiplying the amount you spent by the indexation factor.


	1982	1983	1984	1985	1986	1987	1988	1989
Jan		0.968	0.872	0.783	0.689	0.626	0.574	0.465
Feb		0.960	0.865	0.769	0.683	0.620	0.568	0.454
Mar	1.047	0.956	0.859	0.752	0.681	0.616	0.562	0.448
Apr	1.006	0.929	0.834	0.716	0.665	0.597	0.537	0.423
May	0.992	0.921	0.828	0.708	0.662	0.596	0.531	0.414
Jun	0.987	0.917	0.823	0.704	0.663	0.596	0.525	0.409
Jul	0.986	0.906	0.825	0.707	0.667	0.597	0.524	0.408
Aug	0.985	0.898	0.808	0.703	0.662	0.593	0.507	0.404
Sep	0.987	0.889	0.804	0.704	0.654	0.588	0.500	0.395
Oct	0.977	0.883	0.793	0.701	0.652	0.580	0.485	0.384
Nov	0.967	0.876	0.788	0.695	0.638	0.573	0.478	0.372
Dec	0.971	0.871	0.789	0.693	0.632	0.574	0.474	0.369


	1990	1991	1992	1993	1994	1995	1996	1997
Jan	0.361	0.249	0.199	0.179	0.151	0.114	0.083	0.053
Feb	0.353	0.242	0.193	0.171	0.144	0.107	0.078	0.049
Mar	0.339	0.237	0.189	0.167	0.141	0.102	0.073	0.046
Apr	0.300	0.222	0.171	0.156	0.128	0.091	0.066	0.040
May	0.288	0.218	0.167	0.152	0.124	0.087	0.063	0.036
Jun	0.283	0.213	0.167	0.153	0.124	0.085	0.063	0.032
Jul	0.282	0.215	0.171	0.156	0.129	0.091	0.067	0.032
Aug	0.269	0.213	0.171	0.151	0.124	0.085	0.062	0.026
Sep	0.258	0.208	0.166	0.146	0.121	0.080	0.057	0.021
Oct	0.248	0.204	0.162	0.147	0.120	0.085	0.057	0.019
Nov	0.251	0.199	0.164	0.148	0.119	0.085	0.057	0.019
Dec	0.252	0.198	0.168	0.146	0.114	0.079	0.053	0.016