Budget
Summary: Capital Taxes
March
2008 |
| |
| Capital
gains tax |
| The
2008/09 capital gains tax annual exemption will be £9,600
and the exemption for trusts will generally be £4,800. |
| |
| Capital
gains tax reform |
| Indexation
and taper relief will no longer apply to disposals by individuals
and trustees after 5 April 2008. Any gains realised on disposals
from 2008/09 will be subject to a flat 18% tax rate.
|
| |
| Entrepreneurs'
relief will apply to gains on disposals of trading businesses
and shares and securities of a qualifying trading company. Assets
owned by an individual and used in his or her qualifying trading
company or partnership will also qualify for relief on an associated
disposal. The assets in question must have been held for at
least one year and the relief must be claimed. Furnished holiday
lets will qualify, but other types of property letting businesses
will not. There is no minimum age limit, but the relief is subject
to a cumulative lifetime allowance of £1,000,000 of qualifying
gains. The effective rate of capital gains tax payable on qualifying
gains is 10%. Trustees who hold qualifying business assets may
claim the relief in conjunction with the relevant beneficiary.
|
| |
| Inheritance
tax |
| The
2008/09 inheritance tax nil rate band is £312,000. As
announced in the Pre-Budget Report, up to 100% of the unused
proportion of a deceased spouse's or civil partner's nil rate
band can be claimed on the death of the survivor, if the death
occurred on or after 9 October 2007.
|
| Stamp
taxes |
| The
rates and thresholds for stamp duty land tax are unchanged.
|
| Buyers
of new zero-carbon flats with a purchase price on first sale
of up to £500,000 will not be liable to stamp duty land
tax. Purchases on or after 1 October 2007 will qualify if
the buyer claims the relief by 30 September 2012. Transfers
of an interest in a property within a property investment
partnership will not be subject to stamp duty land tax.
|
| There
will be no charge to stamp duty on instruments transferring
stocks and shares unless the duty would exceed £5. This
applies from 13 March 2008. |
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