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Avoiding the Higher Rate of CGT via Loss Claims


Julie Butler - Expert Author

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Published on 4th October 2010


For 2010/11 and subsequent tax years there is a specific new provision: where gains made by a taxpayer are subject to Capital Gains Tax (CGT) at different rates, allowable capital losses and the CGT annual exemption may be deducted from those gains in a manner most beneficial for the taxpayer (FA (No 2) A 2010 para 3, schedule 1 inserting 4B Taxation of Chargeable Gains Act 1992 (TCGA 1992).

For those not prepared to pay the potentially massive 28% as opposed to 18% rate there is scope for using ‘allowable capital losses’ via the routes of selling assets to realise losses and/or making negligible value claims.  There could be a lot of activity with regard to CGT loss realisation in the months ahead.

The complication is that the specific transfer provisions under FA (No 2) 2010 para 18, schedule 1 means that for 2010/11 when determining whether there is any unused basic rate band it is essential to ignore gains accruing PRIOR to 23 June 2010.

For the farmer/landowner this is of particular concern as they can own large assets of which there are often disposals and there are fluctuating income profits/losses which can be averaged.

About the Author

Article supplied by Julie Butler F.C.A. Butler & Co, Bennett House, The Dean, Alresford, Hampshire, SO24 9BH.  Tel: 01962 735544.  Email;, Website;

Julie Butler F.C.A. is the author of Tax Planning for Farm and Land Diversification ISBN: 0754517691 (1st edition) and ISBN: 0754522180 (2nd edition) and Equine Tax Planning ISBN: 0406966540.  The third edition of Tax Planning For Farm and Land Diversification will be published shortly.

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Article Published/Sorted/Amended on Scopulus 2010-10-22 12:54:56 in Tax Articles

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