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when a person use enterpreneurs relif can apply ( life time allowance 5,000,000) 10% CGT, so, if apply for gift relef, what tax rate will be?
when calculate CGT in the basic band rate £37,400 take cenrtain amount the balance at 18%, then the remaing at 28%.
CGT (37400-X) at 18%
X-37400 at 28%Could you explain how do I know take which amount from the basic band rate? is there any rule can apply it?
Many thanks.
You are unlikely to get both reliefs on the same asset on the exam, but if all of the gain is deferred there is no gain to tax, if some gain remains then it may qualify for ER so at 10%,(it depends if meets the ER conditions) if not then 18% or 28%
The amount of basic rate band remaining is dependant upon the individuals taxable income. So if taxable income was say £20000 there would be £17400 of basic rate band left so taxable gains up to £17400 would be at 18%, the rest at 28%
Hope this helpsok, My question is: if taxable income is £20,000, why is £17,400 at18%? How to get £17400 would be at 18%?
E.g £40,000 how much in 18% ?
Many thanks.
The basic rate band is £37400. if we use as an example taxable income at £20000 then there is £17400 of basic rate band for gains. So using your figures of £40000 taxable gains then £17400 will be at 18% and £22600 at 28%. Can I suggest you look at OT notes chapter 21 which includes lots of examples on this area
Hope this helps
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