Capital gains tax rates and bands are as follows:

Individuals and Trustees

	2009/10	2010/11
Standard rate	18%	18%
Entrepreneurs’ relief - effective rate	10%	10%
Entrepreneurs’ relief - lifetime limit (note 2)	£1,000,000	£2,000,000
Annual exemption
- individual	£10,100	£10,100
- settlement(s) (spread over total number)	£5,050	£5,050
Chattels exemption
(proceeds per item or set)	£6,000
Marginal relief	5/3 excess over £6,000

Notes

1. Transfers between spouses and civil partners living together are exempt.
2. Entrepreneurs’ relief is available in respect of gains made on the disposal of all or part of a business, or gains made on disposals of assets following the cessation of a business or gains by certain individuals who were involved in running the business. The first £2 million (2009/2010 £1 million) of gains that qualify will be charged to CGT at an effective rate of 10%. Gains in excess of £2 million will be charged at the normal rate of 18%. An individual will be able to make claims for relief on more than one occasion, up to a lifetime total of £2 million of gains qualifying for relief.

Companies

Capital gains made by companies are subject to corporation tax and are deemed to arise in the accounting period in which the disposal falls after taking into account allowable losses and indexation.

Simply adjusting the acquisition cost from the disposal proceeds, produces an unindexed gain. The indexation allowance is calculated with reference to the Retail Price Index and adjusts the acquisition price of the disposed asset to take into account inflation. The indexation allowance may reduce a chargeable gain but cannot create or augment a capital loss and can therefore never exceed the amount of the unindexed gain.