Rates of tax: from 23 June 2010: example
In August 2010 an individual realises a chargeable gain of £30,000. She has taxable income in 2010-11 of £20,000 after allowances. The annual exempt amount is £10,100 and the basic rate band limit is £37,400.
The amount of the gain chargeable to Capital Gains Tax is £19,900 (£30,000 less £10,100).
The amount of the basic rate band that can be used against that gain is £17,400 (£37,400 less £20,000).
The amount of the gain that is chargeable at 28% is £2,500 (£19,900 less £17,400).
So the amount of Capital Gains Tax payable is £3,832 (£17,400 at 18% plus £2,500 at 28%).
There is guidance and more examples at CG21600+ to illustrate how losses and the annual exempt amount are set off in the most beneficial way in order to minimise the amount of Capital Gains Tax payable.