Capital Gains - Tax Tapered Relief

Updated March 2004

Announced by Gordon Brown in his 2000 budget, Tapered tax relief on Capital Gains Tax (CGT) is the percentage reduction of a gain that is chargeable to tax on assets disposed of after 5 April 1998. Different rates of relief are applied depending on whether the asset is classed as business or non-business.

The greatest tax relief is applied to business assets, which are defined as:

• Assets used in a business
• All shareholdings in unlisted trading companies, including AIM companies
• Any shareholding of 5% or more in a quoted trading company and any shareholding in such a company held by any employee or director. (All employees, not just full-time employees, will qualify)
• Assets held by a shareholder, whose shares are business assets and are used in the company's trade

All other assets are classed as Non-business assets.

*Non-business assets acquired before 17 March 1998 qualify for an addition of one year to the period for which they are held after 5 April 1998.

# Applies to disposals made after 6th April 2002.