CGT Taper Relief
CGT Taper Relief
When it comes to Capital Gains Tax (CGT), there is a special kind of tax relief available to help reduce the financial burden. This is called CGT taper relief, as it literally ‘tapers’ the tax rates applicable to an asset over time, reducing them based on how long you possess an asset before you dispose of it.
CGT taper relief differentiates between business and non-business assets, with the former benefiting from a superior taper relief over a shorter period of time. CGT taper relief is applicable as tax rate reductions, as follows:
|
Years Asset is Held: |
Taper Relief %
for Business |
Taper Relief %
for Non-Business |
|
1 |
50 |
0 |
|
2 |
75 |
0 |
|
3 |
75 |
5 |
|
4 |
75 |
10 |
|
5 |
75 |
15 |
|
6 |
75 |
20 |
|
7 |
75 |
25 |
|
8 |
75 |
30 |
|
9 |
75 |
35 |
|
10 |
75 |
40 |
Thus after 10 years, you would only need to pay a quarter of the normal Capital Gains Tax on a business asset, and only 60% of the normal tax on a non-business asset.
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Disclaimer: Every effort is made to keep the site accurate, however please bear in mind that tax rates are subject to change. If you require capital gains tax advice you should speak to a professional tax adviser.