Capital Gains, Inheritance Tax & Stamp Duty

Capital Gains Tax

Annual exempt amount 2015-16 (£) 2014-15 (£)
Individuals 11,000 11,000
Other trustees (spread between each trust) 5,550 5,500

 

2015-16 (£) 2014-15 (£)
Standard Rate of tax 18% 18%
Higher Rate* 28% 28%
Entrepreneurs’ Relief – effective rate 10% 10%
Entrepreneurs’ Relief lifetime limit £10million £10million

Entrepreneurs’ relief is available on qualifying lifetime gains on or after 6th April 2008.

*The higher rate applies to higher and additional rate taxpayers.

Transfers between husband and wife or civil partners that live together are exempt.

Inheritance Tax

Inheritance tax (IHT) may be payable when an individual’s estate is worth more than the IHT nil rate band when they die.

The IHT threshold available on death may be increased for surviving spouses as there may have been a nil rate band not used, or not fully used, on the previous death.

There are reliefs for some assets which reduce their value for IHT purposes.

IHT may also be payable on gifts made in an individual’s lifetime but within seven years of death.

Some lifetime gifts are exempt.

Transfers of assets into trust made in an individual’s lifetime may be subject to an immediate charge but at lifetime rates. There are also charges on some trusts.

All the IHT rates and reliefs are unchanged from 2014/15.

Threshold

Rate %
Lifetime rate 20
Death rate 40
Death rate if sufficient charitable legacies made 30

Reliefs for lifetime gifts

Annual Exemption: £3,000

Small Gifts: £250

Marriage: The amount of relief depends on who the gift is from…

Gift from %
Parent 5,000
Grandparent 2,500
Bride/groom 2,500
Other 1,000

Reduced charge on gifts within seven years of death

Years before death % of death charge
0-3 100
3-4 80
4-5 60
5-6 40
6-7 20

Stamp Duty and Land Tax

Stamp duty is payable on the transfer of shares in a company if the transaction is over £1,000.

Stamp duty reserve tax is payable if shares are purchased through the CREST system (e.g. through a stockbroker).

The rate in either case is 0.5% of the consideration given.

Stamp Duty Land Tax

SDLT is payable on land and property transactions in England, Wales and Northern Ireland. From 1 April 2015 property transactions in Scotland are subject to Land and Buildings Transaction Tax.

Residential property

From 4 December 2014 onwards:

The rates apply to the portion of the total value which falls within each band in respect of transactions with an effective date on or after 4 December 2014.

Consideration (£) Rate (%)
0 – 125,000 0
125,001 – 250,000 2
250,001 – 925,000 5
925,001 – 1,500,000 10
1,500,001 and above 12

Rates to 3 December 2014:

If the residential property value is above a threshold, SDLT is charged at that rate on the whole amount of the consideration.

Consideration (£) Rate (%)
0 – 125,000 0
125,001 – 250,000 1
250,001 – 500,000 3
500,001 – 1,000,000 4
1,000,001 – 200,00,00 5
Over 2,000,000 7

Non-residential property

2015/16 (unchanged from 2014/15):

If the non-residential property value is above a threshold, SDLT is charged at that rate on the whole amount of the consideration.

Rate (%)
0 – 150,000 0
150,001 – 250,000 1
250,001 – 500,000 3
Over 500,000 4

Land and buildings Transaction tax

Land and Buildings Transaction Tax (LBTT) is payable on land and property transactions in Scotland with an effective date on or after 1 April 2015.

Residential property

The rates apply to the portion of the total value which falls within each band in respect of transactions with an effective date on or after 1 April 2015. For transaction prior to 1 April 2015 see Stamp Duty Land Tax.

Consideration (£) Rate (%)
0 – 145,000 0
145,001 – 250,000 2
250,001 – 325,000 5
325,001 – 750,000 10
750,001 and above 12

Non-residential property

The rates apply to the portion of the total value which falls within each band in respect of transactions with an effective date on or after 1 April 2015. For transaction prior to 1 April 2015 see Stamp Duty Land Tax.

Consideration (£) Rate (%)
0 – 150,000 0
150,001 – 350,000 3
Over 350,000 4.5