Budget 2011 Capital Gains Tax

Budget 2011 Capital Gains Tax.

• The annual exempt amount (AEA) for 2010/11 has been increased to £10,600.
  

• From April 2012 the consumer prices index (CPI) will be used as the default indexation assumption for capital gains tax (CGT) annual exempt amount instead of the retail prices index (RPI) that is currently used.  The index will be that of the previous September and the exemption will be rounded up to the nearest £100.  However, Parliament will still be entitled to override automatic indexation and set a different figure.
  

• For individuals, the rate of CGT remains at 18 per cent where total taxable gains and income are less than the upper limit of the income tax basic rate band.  
  

• The 28 per cent rate applies to gains (or any parts of gains) above that limit.  For trustees and personal representatives of deceased persons, the rate of CGT remains at 28 per cent.

• The lifetime limit on gains qualifying for capital gains tax (CGT) Entrepreneurs' Relief is increased from £5 million to £10 million from 6 April 2011.

• The rate of CGT for gains qualifying for entrepreneurs’ relief remains at 10 per cent.
  

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