CG21010 - Rates of tax: from 1965 to 5 April 2008

TCGA92/S4

Rates of Capital Gains Tax have varied since the tax was introduced in 1965. This page lists the rates that applied at various times between 1965-66 and 2007-08. For the rates that apply

• from 6 April 2008 to 22 June 2010 see CG21100
• from 23 June 2010 see CG21200+

1965-66 to 1987-88

From 1965-66 to 1987-88 the rate of Capital Gains Tax was 30%, subject to the following reliefs for individuals

• 1965-66 to 1977-78 alternative charge, see FA65/S65
• 1970-71 to 1976-77 small disposals, see FA71/S57
• 1977-78 to 1979-80 relief for gains less than £9,500, see FA78/S44 and FA78/SCH7.

1988-89 to 1992-93

From 1988-89 to 1992-93 gains were chargeable at rates equivalent to the rates of income tax that would have applied if the gains had been treated as the top slice of income.

The gains did not become income and unused personal allowances and income tax reliefs could not be set against chargeable gains, with the exception of relief for trading losses from 1991-92 onwards (FA91/S72, replaced by ITA07/S64 with effect from 2007-08 and applied to Capital Gains Tax by TCGA92/S261B), see BIM75420.

1993-94 to 1995-96

Finance Act 1993 introduced changes to the taxation of dividend income. As a result the rates at which gains were chargeable were modified if the total of income other than dividend income was less than the lower rate band limit. The part of the lower rate band not used by income other than dividend income was allocated to chargeable gains instead of to dividend income. The balance of chargeable gains was then treated as the top slice of income to determine the rates of tax applying.

The income tax reliefs listed at CG21100 could be set against chargeable gains, but relief for post cessation expenditure applies only to payments made on or after 29 November 1994 and relief for post-employment expenses applies only to payments made on or after 6 April 1995.

1996-97 to 1998-99

This approach was extended by Finance Act 1996 to other forms of investment income. The rates at which gains were chargeable were modified if the total of income other than investment income was less than the lower rate band limit. The part of the lower rate band not used by income other than investment income was allocated to chargeable gains instead of to investment income. The balance of chargeable gains was then treated as the top slice of income to determine the rates of tax applying.

There was no change in these years or in subsequent years in the income tax reliefs that could be set off against chargeable gains.

1999-00

For 1999-00 there were two rates of Capital Gains Tax. Where an individual’s total income did not exceed the basic rate band limit chargeable gains were taxed at 20% up to that limit. Beyond that, and where the basic rate band was taken up by income, chargeable gains were taxed at 40%. The starting rate of 10% did not apply to Capital Gains Tax.

2000-01 to 2007-08

The starting rate of 10% could be used against chargeable gains from 2000-01 onwards. Chargeable gains continued to be taxed as if they were the top slice of income.

The adjustments to the basic rate band that have been restored for the Capital Gains Tax rates regime that applies from 23 June 2010 and that are described at CG21230 also applied to the rates regime for 2007-08 and earlier years.