Tax changes for 2011–12: Capital gains tax

The tax-free allowance for 2011–12 has not yet been announced.

The 22 June 2010 Budget introduced a new 28 per cent rate. For gains made from 23 June 2010, the gains are added to your income for the year and any part that falls into the higher-rate or additional-rate band is taxed at 28 per cent.

Gains that fall within the basic-rate band continue to be taxed at 18 per cent. The lifetime limit for entrepreneurs’ relief rose to £5 million from £2 million on 23 June 2010.

The rate of entrepreneurs’ relief was set at 10 per cent (which is the pre-23 June 2010 effective rate). As a result of the change to capital gains tax rates, HMRC has announced that it will no longer be possible to both defer capital gains using an EIS and obtain entrepreneurs’ relief on the same gains.

Capital gains deferred using an EIS before 23 June 2010 will still be eligible for entrepreneurs’ relief in the same way as before.