Tax Tips - Capital Gains Tax

These tips are guidance only and do not constitute specific advice. Detailed professional advice should be taken before action or refraining from action.

Attempts should be made to fully utilise the annual exemption limit, £10,100 for 2010/2011 which cannot be carried forward to following years.

Disposals could be brought forward prior to the end of the tax year to maximise the exemption threshold.

Where gains exceed the annual exemption limit in a tax year it is advisable to reduce the excess by creating losses. This could be achieved by bringing forward a disposal date which would otherwise fall after the end of the tax year.

It will be possible to defer the payment of Capital gains Tax on gains if the disposal of the asset is deferred until the next tax year, especially if the annual exemption has already been used in the current tax year.

Gifts between husband and wife are tax free. This is particularly useful when maximising annual exemptions and also IHT planning - see IHT section below -

Taper relief was abolished from April 2008 and a new simplified system introduced and all gains taxed at a rate of 18% or a lower rate of 10%. You should seek guidance to how this change affects you.