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Are Basic and Additional Rate Bands also increased for Capital Gains Tax CGT like wise what we do for Income Tax ?
IF yes then by what and can a example be demonstrated?
Thank You.
can you explain with what do we increase like in income tax we increase limitations by the personal pension contributions or donations .
What about CGT ?
The only rate band relevant for CGT is the basic rate band. The extended basic rate band is the same as used in the income tax computation ie add the gross gift aid and personal pension contributions.
For example in 2013/14 a taxpayer has £35.000 taxable income and paid a personal pension contribution of £4,000.
The basic rate band limit would now be computed as:
32,010 + (4,000 x 100/80) = 37,010
The taxpayers income is therefore entirely within the basic rate band. If he also has taxable gains (ie after deduction of annual exempt amount) of £10,000 then the first 2,010 will be taxed at 18% and the balance of 7,990 will be taxed at 28%.
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