Capital Gains - Taper Relief
Taper relief can reduce a chargeable gain on a disposal made after 5 April 1998. It is applied to net gains after any indexation allowance. Losses are set off before taper relief, and are deducted so as to minimise the total chargeable gain. Different rates of taper relief apply to business assets and non-business assets. Business assets include:
- Assets used in a business.
- All shareholdings in unlisted trading companies, including AIM companies.
- Employee holdings of up to 10% in non-trading companies.
- Any shareholding of 5% or more in a quoted trading company and any shareholding in such a company held by any employee or director.
- Assets held by a shareholder, whose shares are business assets and are used in the company’s trade.
|
Number of complete years after 5 April 1998 for which asset is held* |
Business assets % of gain taxable |
Non-business assets % of gain taxable |
|
0 |
100 |
100 |
|
1 |
87.5 |
100 |
|
2 |
75 |
100 |
|
3 |
50 |
95 |
|
4 |
25 |
90 |
|
5 |
25 |
85 |
|
6 |
25 |
80 |
|
7 |
25 |
75 |
|
8 |
25 |
70 |
|
9 |
25 |
65 |
|
10 or more |
25 |
60 |
Non-business assets acquired before 17 March 1998 qualify for an addition of one year to the period for which they are held after 5 April 1998.