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Emergency Budget: comment from advisors on private client taxes

The big story in the run-up to the Budget was the promised increase in the rate of capital gains tax. In the event the rate rose to 28% from 23 June 2010. Although substantial particularly as it was not accompanied by any form of indexation or taper relief the increase was considerably less than the rise to 40% that had been rumoured. There are now therefore two rates of capital gains tax 18% for basic rate taxpayers and 28% for those on the higher rates. Entrepreneurs’ relief is continued with the lifetime allowance increased from £2 million to £5 million.

The change in tax rate part way through a tax year throws up many questions about transitional issues and we shall need to await draft legislation to see how these are approached. The Budget note indicates that losses and the annual exempt amount may be used...

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