Capital Gains Tax Affects Thousands

Capital Gains Tax Affects Thousands

Skandia predicts, 45 per cent more people will pay capital gains tax (CGT) this year compared with last year.  The company says that some investors will pay a lower rate of CGT due to introduction of the 18 per cent flat rate but overall more people will be liable to pay the tax.  Skandia says this is due to the removal of indexation and taper relief, which has reduced the real value of the annual CGT exemption.

Previously clients holding assets for 10 years or more would only pay tax on 60 per cent of their gain and could reduce their CGT liability as taper relief was applied before annual exemption.  In 2007, a total of 260,000 people paid CGT and based on a calculation of Government figures, Skandia expects this to rise by over a third to reach 350,000 this year.

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