2005 Budget summary cards by McCabes.
»Introduction
»Personal Income Tax
»Tax Credits
»National Insurance
Contributions
»Employees
»Pensioners
»Savings
»Trusts
»Capital Gains Tax
»Stamp Duty Land Tax
»Inheritance Tax
»Corporation Tax
»Business Tax
»Value Added Tax
»Other Measures
»Tax Tables
»National Insurance
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Capital Gains Tax
Annual exemption and tax rates
The annual exemption for individuals has been increased to £8,500 for 2005/06 (2004/05: £8,200). Trustees receive half this figure (£4,250 for 2005/06; £4,100 for 2004/05), although this may be shared between trusts which have been set up by the same person.
In spite of some alarmist stories about abolition of the exemption for a taxpayer's only or main residence, the Budget confirmed that this will be retained (at least for the time being); and, in spite of some optimistic suggestions that the complications of CGT taper relief might be reduced, there were no changes in that area.
Anti-avoidance measures
The Chancellor tried to close down a number of CGT avoidance schemes, including:
- individuals becoming temporarily non-resident and taking advantage of double tax agreements with other governments to avoid any charge to UK CGT on gains realised while abroad;
- trusts becoming non-resident and also trying to exploit double tax agreements;
- exploiting the rules on foreign-located assets, on which foreign domiciled individuals only pay CGT if they bring the proceeds back to the UK.
Closing CGT loopholes has been notoriously difficult for the Chancellor, who usually has to return several times to achieve the desired result. It remains to be seen whether these measures will close the holes straight away.
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