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HMRC internal manual

Capital Gains Manual

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HM Revenue & Customs
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Annual exempt amount: example

L and M are trustees of property subject to a deed of settlement made in 1970.

The exempt amount for the year 1998-99 is £6,800 and so the trust exemption is £3,400.

The trustees made chargeable gains of £6,000. There are no losses brought forward. Thetaper is 10 per cent.

The taxable amount, see CG18031, is

Gains 6,000
   
Taxable amount after taper 5,400
Annual exemption 3,400
Chargeable 2,000

If there were losses of £4,000 brought forward, £2,600 of these losses would be usedto reduce the untapered gains to the amount of the exemption. The balance of £1,400losses would be carried forward.

Suppose that the gain had arisen in 1997-98, the year before the introduction of taper.The exempt amount for the year is £6,500 and so the trust exemption is £3,250.

The taxable amount, see CG18031, is

Gains 6,000
   
Annual exemption 3,250
Chargeable 2,750

If there were losses of £4,000 brought forward, £2,750 of these losses would be usedto reduce the untapered gains to the amount of the exemption. The balance of £1,250losses would be carried forward.