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Capital taxes



Inheritance tax

Inheritance tax is currently charged at 40% on the proportion of an individual’s estate exceeding the ‘nil-rate band’ of £325,000. Married couples and registered civil partners can already pass any unused nil-rate band to one another on death.

A new residence nil-rate band (RNRB) now applies in addition to the nil-rate band, allowing a ‘family home’ to be passed wholly or partially tax-free on death to direct descendants such as a child or grandchild. A step-child, adopted child or fostered child is also regarded as a direct descendant.

The RNRB rates are set as follows:









The RNRB can only be used in respect of one residential property. The property does not have to be the main family home, although it must, at some point, have been a residence of the deceased.

There is a tapered withdrawal of the RNRB for estates valued at more than £2m, at a withdrawal rate of £1 for every £2 over this threshold.

Capital gains tax (CGT)

CGT is payable on the profit made when you sell or otherwise dispose of an asset. The rates for 2018/19 are:

On chargeable gains


Total taxable income and gains


Up to higher rate threshold


From higher rate threshold


Trust rate



Higher rates (18%/28%) may apply to the disposal of certain residential property and carried interest.

Annual exempt amount for 2018/19 – individuals £11,700 and most trustees £5,850.

CGT payment window

The introduction of the 30-day payment window for gains on residential property disposals will be deferred until April 2020.


Taxation of carried interest

The government will amend legislation to ensure that asset managers receiving carried interest pay CGT on their full economic gain. The changes will remove the special treatment afforded to carried interest that arises in connection with disposals of assets before certain dates in 2015. The changes will have effect on and after 22 November 2017.

Entrepreneurs’ relief

The government will consult in spring 2018 on how access to the relief might be given to entrepreneurs whose holding in their company is reduced below the normal 5% qualifying level as a result of raising funds for commercial purposes by means of issues of new shares.

Taxing non-residents’ gains on immovable property

The government has published a consultation on taxing non-residents’ gains on immovable property. This measure will broaden the UK’s tax base to include disposals of UK commercial property by non-residents, both directly and indirectly, and will bring all companies into charge on disposals of residential property, and all persons into charge on indirect disposals of residential property. The changes will have effect on and after 1 April 2019 for companies, and on and after 6 April 2019 for those in charge to CGT. An anti-forestalling measure to support this reform will have effect on and after 22 November 2017.

Offshore trusts

New anti-avoidance rules will be introduced relating to the taxation of income and gains accruing to offshore trusts. This measure ensures that payments from an offshore trust intended for a UK resident individual do not escape tax when they are made via an overseas beneficiary or a remittance basis user.

Following consultation, minor changes have been made to the legislation, including to ensure that the onward gift rules can apply if the close family member rule applies, to clarify the position in the year of the settlor’s death and in relation to onward gifts to multiple recipients. The changes will have effect on and after 6 April 2018.