Emergency Budget 2010

We have highlighted two changes announced by George Osborne in his recent Budget.

1. Capital Gains Tax - rate up From midnight on 22 June 2010 the basic rate of CGT was increased from 18% to 28%. The increase will apply when your income and taxable gains exceed the basic rate income tax band, presently £37,400. The 28% rate will only apply to the gains that exceed the £37,400 limit. Trustees will pay 28% on all gains.

2.  CGT-Entrepreneurs' Relief This relief allows gains on the sale of certain qualifying assets to be taxed at the reduced rate of 10%. This relief has not been withdrawn. Surprisingly, for qualifying gains made after 22 June 2010, the lifetime gains that can be covered by this relief have been increased from £2m to £5m.

Finally, a word of caution. Details published by HMRC following the Budget state that CGT rates for 2011-12 will be decided in the 2011 Budget. There may be further CGT rate rises in the pipeline!