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HMRC internal manual

Capital Gains Manual

Rates of tax: from 23 June 2010

The rates at which gains are taxed changed for chargeable gains that accrue on or after 23 June 2010. From that date gains are taxed at 28%, or at 18% to the extent that an individual has any unused part of the basic rate band. There is a simple example at CG21205 to show you how to calculate the rate of tax.

Gains that accrue on or after 23 June 2010 and that qualify for Entrepreneurs’ Relief are taxed at 10%. There is detailed guidance on Entrepreneurs’ Relief at CG63950+. Where an individual has gains that qualify for Entrepreneurs’ Relief those gains use up the basic rate band in priority to other gains (TCGA92/S4(6)). This is illustrated by the example at CG21210.

The amount of gain that is charged to Capital Gains Tax at 18% may be modified in certain special cases that affect the amount of income that is treated as using up an individual’s basic rate band, see CG21230. An individual’s basic rate band may be extended to permit higher rate relief on certain payments and this may affect the amount of gain that is taxed at 18%, see CG21220.

2010-11 is the only year in which the rates of Capital Gains Tax have been changed part of the way through a tax year. Gains that accrue in 2010-11 up to and including 22 June 2010 are taxed at 18%, see CG21000. There are transitional provisions that determine when in 2010-11 a gain is to be deemed to accrue in cases where the relevant legislation does not provide for a precise time of accrual. These transitional provisions are described at CG21240. In other cases the time of accrual depends on the facts and no transitional rule is needed, just as no transitional rule is needed when rates change from one tax year to the next.