Taxation of Chargeable Gains Act 1992

4 Rates of capital gains tax. U.K.

(1) Subject to the provisions of this section F1 ... , the rate of capital gains tax in respect of gains accruing to a person in a year of assessment shall be equivalent to the [F2 savings rate] of income tax for the year.

[F3 (1AA) 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 [F4 the [F5 trust rate]].]

[F6 (1AB) If [F7 an 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 [F8 the individual’s Step 3 income].]

F9 (1A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F9 (1B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) If income tax is chargeable at the higher rate [F10 or the [F11 dividend] 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 [F12 or the [F11 dividend] 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.

F13 (3A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F13 (3B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(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 F14 ... the basic rate limit exceeds [F15 the individual’s Step 3 income].

[F16 (5) 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.]

Textual Amendments

F1 Words in s. 4(1) repealed (with effect in accordance with s. 120(2) of the amending Act) by Finance Act 1998 (c. 36), Sch. 27 Pt. III(29)

F2 Words in s. 4(1) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(2) (with Sch. 2)

F3 S. 4(1AA) inserted (with application in accordance with s. 120(2) of the amending Act) by Finance Act 1998 (c. 36), s. 120(1)

F4 Words in s. 4(1AA) substituted (with effect in accordance with s. 26(6) of the amending Act) by Finance Act 1999 (c. 16), s. 26(3)

F5 Words in s. 4(1AA) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(3) (with Sch. 2)

F6 S. 4(1AB)(1AC) inserted (with effect in accordance with s. 37(2) of the amending Act) by Finance Act 2000 (c. 17), s. 37(1)

F7 Words in s. 4(1AB) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(4) (with Sch. 2)

F8 Words in s. 4(1AC) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(5) (with Sch. 2)

F9 S. 4(1A)(1B) repealed (with effect in accordance with s. 26(6) of the amending Act) by Finance Act 1999 (c. 16), s. 26(4), Sch. 20 Pt. III(1)

F10 Words in s. 4(2) inserted (with effect in accordance with Sch. 4 para. 24(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 24(2)

F11 Word in s. 4(2)(3) substituted (with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 427 (with Sch. 2)

F12 Words in s. 4(3) inserted (with effect in accordance with Sch. 4 para. 24(6) of the amending Act) by Finance (No. 2) Act 1997 (c. 58), Sch. 4 para. 24(3)

F13 S. 4(3A)(3B) repealed (with effect in accordance with s. 26(6) of the amending Act) by Finance Act 1999 (c. 16), s. 26(4), Sch. 20 Pt. III(1)

F14 Words in s. 4(4) repealed (with effect in accordance with s. 26(6) of the amending Act) by Finance Act 1999 (c. 16), s. 26(5), Sch. 20 Pt. III(1)

F15 Words in s. 4(4) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(6) (with Sch. 2)

F16 S. 4(5)(6) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 295(7) (with Sch. 2)