How CGT applies to client portfolios

Back in April 2008, capital gains tax (CGT) was reformed to simplify the process of calculating the liability. There is no longer a requirement to calculate indexation allowance or taper relief. There is also no need to add the taxable gain to income to establish whether basic and/or higher rate income tax would be paid. To make up for the loss of these allowances/reliefs, there would be just one reduced rate of tax of 18%. However, in June 2010 it was announced that the rate of tax would be 28% on those taxable gains within the higher rate tax band. Here’s an example to show this...