Capital Gains Tax Opportunity

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In June 2010, the Chancellor announced that the rate of Capital Gains Tax was increasing from 18% to 28% in respect of gains made on disposals after midnight on 22 June 2010.

There is a window of opportunity to retain a Capital Gains Tax rate of 18% on any disposals before 6 April 2011 but you would need to be either the settlor or a beneficiary of a non UK resident trust.

If you are UK domiciled and the settlor of a non UK trust that is “settlor interested” (i.e., a trust where the beneficiaries include you, or your close family or certain companies controlled by you or your family), then any capital gains made by the trustees at any time this tax year up to 5 April 2011, will be taxed at 18%, and not 28%.

To take advantage of this opportunity, it would be necessary to identify such assets and in the event of it being difficult to sell such assets, there may be ways of creating a disposal for CGT purposes.

Alternatively, if you are the (UK or non UK domiciled) beneficiary of a non UK trust and have received a capital distribution or benefit from the trust in the period 6 April 2010 to 22 June 2010, it may be possible for you to be taxed at 18% in respect of this distribution or benefit. This will depend upon action being taken by the trustees before 6 April 2011.

If you would like to discuss these opportunities, please get in touch with us.

11 October 2010

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About Throgmorton:
Throgmorton is one of the leading companies specialising in the provision of financial and administrative outsourcing in the UK SME financial services sector.

The information in this notice is intended for general guidance only. Throgmorton does not accept any responsibility for losses incurred to any person acting or refraining to act as a result of the information in this notice. Advice should be taken in the context of specific circumstances.