Part I Capital gains tax and corporation tax on chargeable gains

Capital gains tax

4 Rates of capital gains tax.

1

Subject to the provisions of this section F4... , the rate of capital gains tax in respect of gains accruing to a person in a year of assessment shall be equivalent to the F11savings rate of income tax for the year.

F31AA

The rate of capital gains tax in respect of gains accruing to—

a

the trustees of a settlement, or

b

the personal representatives of a deceased person,

in a year of assessment shall be equivalent to the rate which for that year is F5the F12trust rate.

F91AB

If F13an individual has no Step 3 income for a year of assessment or the individual’s Step 3 income for the year is less than the starting rate limit, then—

a

if the amount on which he is chargeable to capital gains tax does not exceed the unused part of his starting rate band, the rate of capital gains tax in respect of gains accruing to him in the year shall be equivalent to the starting rate;

b

if the amount on which he is chargeable to capital gains tax exceeds the unused part of his starting rate band, the rate of capital gains tax in respect of such gains accruing to him in the year as correspond to the unused part shall be equivalent to the starting rate.

1AC

The references in subsection (1AB) above to the unused part of an individual’s starting rate band are to the amount by which the starting rate limit exceeds F14the individual’s Step 3 income.

F61A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F61B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2

If income tax is chargeable at the higher rate F1or the F10dividend upper rate in respect of any part of the income of an individual for a year of assessment, the rate of capital gains tax in respect of gains accruing to him in the year shall be equivalent to the higher rate.

3

If no income tax is chargeable at the higher rate F2or the F10dividend upper rate in respect of the income of an individual for a year of assessment, but the amount on which he is chargeable to capital gains tax exceeds the unused part of his basic rate band, the rate of capital gains tax on the excess shall be equivalent to the higher rate of income tax for the year.

F73A

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F73B

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4

The reference in subsection (3) above to the unused part of an individual’s basic rate band is a reference to the amount by which F8... the basic rate limit exceeds F16the individual’s Step 3 income.

F155

For the purposes of this section the “Step 3 income” of an individual means the individual's net income less allowances deducted at Step 3 of the calculation in section 23 of ITA 2007 for the purpose of calculating the individual's income tax liability.

6

Section 989 of ITA 2007 (the definitions) applies for the purposes of this section as it applies for income tax purposes.