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the rates of 10%,18% and 28% to calculate the cgt due,on what limit are we rating them ?
CGT for e relief is 10%(the only limit for this is lifetime limit 10 million)
for basic rate tax payer CGT is 18% until 32010 and thereafter at 28%.For example your taxable income is 20000 after personal allowance and CG is 25000 after annual exemption
CGT
32010-20000=12010 at 18%
And 25000-12010=12990 at 28%
If you have gain qualifying for e relief, it should first use the basic rate band.If the tax payer is a higher rate tax payer, he will be paying CGT @ 28%.
CGT
12000@ 28% = 3360If the gain is qualified for e relief, CGT will be 1200 (12000@10%)
If the taxpayer made gross personal contribution of 50000, the his basic rate band will be 82010 (32010+50000). Taxable income of 60000 will utilized 60000 of basic rate band. The remaing basic rate band is 22010.
CGT will be as follows
12000@18% = 2160. (Because 12000 is within the basic rate band.
If the gain is qualified for e relief, CGT will be 1200 (12000@10%)
If the taxable income is 60000 and taxable gain is 12000 not qualified for e relief and 22010 qualified for e relief.
If the taxpayer made gross personal pension contribution of 50000.CGT
22010@10% = 2201
12000@28% = 3360Gain qualified for e relief will always utilized the basic rate band first.
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