By continuing your visit to this site, you accept the use of cookies. They ensure the proper functioning of our services and display relevant ads. Learn more about cookies and act

Not yet registered? Create a OverBlog!

Create my blog

What is the UK Capital gains tax rate

The profit that a person makes when s/he ceases to own an asset is considered to be a taxable amount in the United Kingdom. This tax is known as the Capital Gains Tax. However, it is not as simple as merely selling an asset. The gain can also be taxed if the asset is given away as a gift, is transferred to someone else, is exchanged for something else or even if compensation for the asset is received.

The basics

How it works
If an individual buys shares for £1000 in June 2000 and sells them for £10000 in
June 2010, he has made a profit of £9000. This amount is then, subject to the Capital Gains Tax rate. An individual
If you are acting as an individual and you have made a profit from a Capital Gains transaction, you will be charged at a rate of between 18-28 percent of taxation.
18 percent is the flat rate, but this rose to 28 percent for higher earners as of
June 2010. A company
The calculation for companies is slightly more complex than for individuals. Companies use what is known as "indexation relief" to the base cost. It is increased according to the retail prices index. This means that the profit is calculated on an inflationary basis. Once the profit has been calculated, the company is taxed at the appropriate marginal rate of company tax.

Other information

Exemptions
Some assets are exempt from Capital Gains Tax. These include your car: personal possessions that are worth up to £6000 each, such as jewellery, paintings or antiques; stocks and shares that are held in tax-free investment savings accounts, such as ISAs and PEPs; UK state or 'gilt-edged' securities such as National Savings Certificates, premium bonds and loan stock issued by the Treasury; betting, lottery or pools winnings; personal injury compensation and foreign currency held for personal use outside the UK. Corporation Tax Act 2010
Capital Gains Tax is outlined in the Corporation Tax Act 2010. It is an act of parliament that received royal assent in March 2010. Reporting a loss
When an asset loses most or all its value, the owner may be able to claim this as a loss, even if he still owns it as an asset. The only prerequisite is that the asset must have lost its value during the time that s/he owned it. If this is the case, a negligible value claim can be made.

Same category articles Taxation

An introduction to campaign finance law in the UK

An introduction to campaign finance law in the UK

This article will provide an account of the campaign financing laws of the United Kingdom. Laws have been in place to prevent politicians from engaging in excessive spending since the introduction of the Illegal Practices Prevention Act in 1883. The regulation for campaign financing exists to limit the extent to which candidates and political parties can spend during their campaigns.
Lump-sum tax: The facts

Lump-sum tax: The facts

Lump-sum tax is a fixed amount of tax payable by everyone without considering their income levels. This tax deduction is not influenced by the different income levels of individuals, ownership of property, lifestyle or how they spend. This article gives you a detailed account of lump-sum tax.
How to calculate income tax in the UK

How to calculate income tax in the UK

The UK income tax liability is calculated on the income received in the tax year to 5 April after deduction of relevant expenses and allowances. Income from employment, self-employment, property and savings must be taken into account.
How to calculate taxable income

How to calculate taxable income

Knowing how to calculate taxable income and tax payable are necessary skills that everyone should master. Having knowledge when it comes to taxation not only saves you accounting fees attached to filing tax papers, but also gives you a better appreciation of taxes and its utilitarian purpose. In this article, learn how to calculate taxable income.