Taper Relief

Taper relief is a very important aspect of Capital Gains Tax and can greatly reduce the amount of tax that you are liable to pay on any capital gains that you may have made.

Taper relief works by reducing the tax rate on an asset depending on how long you have held that particular asset, and whether it is business or non-business in nature.  The amount of taper relief available in reference to the amount of time the asset has been held is as follows:

 Years 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 2 years, a business asset will have reached its maximum taper relief of 75%, while after 10 years a non-business asset will have reached its maximum taper relief of 40%.

The tax rate applicable to the asset is reduced by the appropriate amount – so at a 20% tax rate on the assets, a business asset held for 10 years would only be subject to 5% tax rate, while a non-business asset held for 10 years would only be subject to a 12% tax rate.

For more information on Capital Gains Tax, take a look at the guides and software in our online Fair Investment Tax Bookshop.

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 tax advice you should speak to a professional tax adviser.