Capital Gains Tax (CGT) Rates and Annual Exemption
No changes have been announced in respect of CGT rates or the annual exemption of 18% or 28% and £11,100 for 15-16
Inheritance Tax (IHT) nil Rate Band
The IHT nil rate band is currently frozen at £325,000 until April 2018. This is to remain frozen until April 2021.
IHT and the Main Residence Nil Rate Band
An additional nil rate band is to be introduced where a residence is passed on death to direct descendants such as a child or a grandchild. This will initially be £100,000 in 2017/18, rising to £125,000 in 2018/19, £150,000 in 2019/20, and £175,000 in 2020/21. It will then increase in line with the Consumer Price Index from 2021/22 onwards. The additional band can only be used in respect of one residential property which has, at some point, been a residence of the deceased.
Any unused nil rate band may be transferred to a surviving spouse or civil partner. It will also be available when a person downsizes or ceases to own a home on or after 8 July 2015 and assets of an equivalent value, up to the value of the additional nil rate band, are passed on death to direct descendants. This element will be the subject of a technical consultation and will be legislated for in the Finance Bill 2016.
There will also be a tapered withdrawal of the additional nil rate band for estates with a net value (after deducting any liabilities but before reliefs and exemptions) of more than £2 million. This will be at a withdrawal rate of £1 for every £2 over this threshold.