Fenn & Co - Capital Gains Tax

Accountants, Tax Advisers And Business Consultants

CAPITAL GAINS TAX

A fundamental reform of the capital gains tax (CGT) system was made in 1998 for individuals, trustees and personal representatives. A number of further changes have been made since then. A capital gain arises when certain capital (or 'chargeable') assets are sold at a profit. The gain is the sale proceeds (net of selling costs) less the purchase price (including acquisition costs). From this a deduction may be possible to reduce the gain further. In some situations a major review of tax planning arrangements may be required because of the changes. In recent years major changes have been made to:-

The treatment of Business Assets and Non-Business Assets, for which

the identification is vital as there are substantial differences as to the

amount of CGT payable

The axing of Indexation Allowance and the introduction of Taper

Relief

The axing of Retirement Relief as from the 6^th April 2003

The way in which share disposals are taxed

More specific issues such as deferring gains through The Enterprise

Investment Scheme (EIS) and Venture Capital Trust (VCT) schemes

Correct planning can dramatically affect the amount of CGT payable. If you are contemplating the sale of your business interests or any disposal of a capital asset then the timing of the sale and how that disposal is carried out could be critical. Capital Gains Tax also interacts substantially with the other taxes such as Inheritance Tax. Therefore it is necessary for us to review your tax affairs beyond that of just the capital disposal in order to act in your best interests.

In addition you may require us to act on your behalf in the calculating of a capital gain or loss on a disposal already made, the claiming of any such losses in the most beneficial way or negotiating with the Inland Revenue in connection with any enquiry.

We would be happy to advise you as to the above and the various options available.

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