Capital Gains Tax

Question 1

Give 4 facts about Entrepreneurs Relief?

Answer 1

1. Available when an individual disposes of all or part of a business and any associated disposals
2. Business and associated assets must have been owed for at least a year prior to disposal
3. Lifetime allowance for ER is £10 million
4. ER is payable at 10% regardless of personal tax rates

Question 2

What gains do you use the annual exemption against?

Answer 2

The gains with the higher tax rate i.e 20% rather than 10% even if the amount of tax under the lower tax rate is higher

Question 3

When must current year losses be used?

Answer 3

Against current years gains and before the annual exemption, only once exhausted can you use the exemption.