CGT Investors’ Relief for trustees

It cannot be denied that, if enacted, the present Finance Bill will significantly increase the complexity of Capital Gains Tax (CGT), not least as a result of the number of different rates at which CGT will be charged. The reduction in the generally applicable CGT rate from 28% to 20% will doubtless be welcome. However, the retention of the 28% rate to be applied to ‘upper rate gains’, an 18% rate to be applied to upper rate gains, and a 10% rate to be applied to other gains where the taxpayer’s income is below the basic rate ceiling will add to the complexity of the computations. For this purpose upper rate gains are, of course, those derived from a disposal of residential property. Apart from this collection of CGT rates, there is the 10% rate applied to gains qualifying for Entrepreneurs’ Relief, and the 10% rate which will apply to gains from disposals of shares in unquoted trading companies, which satisfy the conditions for the new Investors’ Relief. The detailed legislation for the new relief is contained in Sch 14 (originally Sch 10) of the Finance Bill to be considered by the House of Commons in September (the Report Stage). The Bill now contains detailed provisions governing disposals by trustees.