Capital Gains Tax Act 1979
Capital Gains Tax Act 1979
1979 CHAPTER 14
An Act to consolidate Part III of the Finance Act 1965 with related provisions in that Act and subsequent Acts.
[22nd March 1979]
Be it enacted by the Queen's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this present Parliament assembled, and by the authority of the same, as follows:—
Part I
General
Capital gains tax and corporation tax
1 Taxation of capital gains.
(1) Tax shall be charged in accordance with this Act in respect of capital gains, that is to say chargeable gains computed in accordance with this Act and accruing to a person on the disposal of assets.
(2) In the circumstances prescribed by the provisions of Part XI of the Taxes Act (taxation of companies and certain other bodies and associations) the tax shall be chargeable in accordance with those provisions, and all the provisions of this Act have effect subject to those provisions.
(3) Subject to the said provisions, capital gains tax shall be charged for all years of assessment in accordance with the following provisions of this Act.
Capital gains tax
2 Persons chargeable.
(1) Subject to any exceptions provided by this Act, a person shall be chargeable to capital gains tax in respect of chargeable gains accruing to him in a year of assessment during any part of which he is resident in the United Kingdom, or during which he is ordinarily resident in the United Kingdom.
(2) This section is without prejudice to the provisions of section 12 below (non-resident with UK branch or agency), and of section 38 of the Finance Act 1973 (territorial sea of the United Kingdom).
3 Rate of tax.
3. The rate of capital gains tax shall be 30 per cent.
4 Gains chargeable to tax.
(1) Capital gains tax shall be charged on the total amount of chargeable gains accruing to the person chargeable in the year of assessment, after deducting—
(a ) any allowable losses accruing to that person in that year of assessment, and
(b ) so far as they have not been allowed as a deduction from chargeable gains accruing in any previous year of assessment, any allowable losses accruing to that person in any previous year of assessment (not earlier than the year 1965-66).
(2) In the case of a woman who in a year of assessment is a married woman living with her husband any allowable loss which, under subsection (1) above, would be deductible from the chargeable gains accruing in that year of assessment to the one but for an insufficiency of chargeable gains shall, for the purposes of that subsection, be deductible from chargeable gains accruing in that year of assessment to the other:
Provided that this subsection shall not apply in relation to losses accruing in a year of assessment to either if, before 6th July in the year next following that year of assessment, an application is made by the man or the wife to the inspector in such form and manner as the Board may prescribe.
5 Relief for gains less than 9,500.
(1) An individual shall not be chargeable to capital gains tax for a year of assessment if his taxable amount for that year does not exceed 1,000.
(2) If an individual's taxable amount for a year of assessment exceeds 1,000 but does not exceed 5,000, the amount of capital gains tax to which he is chargeable for that year shall be 15 per cent. of the excess over 1,000.
(3) If an individual's taxable amount for a year of assessment exceeds 5,000, the amount of capital gains tax to which he is chargeable for that year shall not exceed 600 plus one-half of the excess over 5,000.
(4) For the purposes of this section an individual's taxable amount for a year of assessment is the amount on which he is chargeable under section 4(1) above for that year but—
(a ) where the amount of chargeable gains less allowable losses accruing to an individual in any year of assessment does not exceed 1,000, no deduction from that amount shall be made for that year in respect of allowable losses carried forward from a previous year or carried back from a subsequent year in which the individual dies, and
(b ) where the amount of chargeable gains less allowable losses accruing to an individual in any year of assessment exceeds 1,000, the deduction from that amount for that year in respect of allowable losses carried forward from a previous year or carried back from a subsequent year in which the individual dies shall not be greater than the excess.
(5) Where in a year of assessment—
(a ) the amount of chargeable gains accruing to an individual does not exceed 1,000, and
(b ) the aggregate amount or value of the consideration for all the disposals of assets made by him (other than disposals gains accruing on which are not chargeable gains) does not exceed 5,000,
a statement to the effect of paragraphs (a ) and (b ) above shall, unless the inspector otherwise requires, be sufficient compliance with any notice under section 8 of the Taxes Management Act 1970 requiring the individual to make a return of the chargeable gains accruing to him in that year.
(6) Schedule 1 to this Act shall have effect as respects the application of this section to husbands and wives, personal representatives and trustees.
6 Small gifts.
6. A gain accruing to an individual on a disposal by way of gift of an asset the market value of which does not exceed 100 shall not be a chargeable gain, but this section shall not apply to gifts made by the same individual in the same year of assessment the total value of which exceeds 100.
7 Time for payment tax.
7. Capital gains tax assessed on any person in respect of gains accruing in any year shall be payable by that person at or before the expiration of the three months following that year, or at the expiration of a period of thirty days beginning with the date of the issue of the notice of assessment, whichever is the later.
8 Postponement of payment of tax.
(1) Where the whole or part of any assets falling within subsection (3) below—
(a ) is disposed of by way of gift, or
(b ) is under section 54(1) or 55(1) below (settled property) deemed to be disposed of,
the capital gains tax chargeable on a gain accruing on the disposal may, at the option of the person liable to pay it, be paid by eight equal yearly instalments or sixteen half-yearly instalments.
(2) Payment of capital gains tax in accordance with subsection (1) above shall be subject to the payment of interest under Part IX (except sections 87 and 88) of the Taxes Management Act 1970 except as provided by section 9 below.
(3) The assets referred to in subsection (1) above are—
(a ) land or an estate or interest in land,
(b ) any shares or securities of a company which, immediately before the disposal, gave control of the company to the person by whom the disposal was made or deemed to be made,
(c ) any shares or securities of a company not falling under paragraph (b ) above and not quoted on a recognised stock exchange in the United Kingdom or elsewhere, and
(d ) any assets used exclusively for the purposes of a trade, profession or vocation which, immediately before the disposal, was carried on (whether alone or in partnership) by the person by whom the disposal was made or deemed to be made.
(4) Where tax is payable by instalments by virtue of this section the first instalment shall be due at the expiration of twelve months from the time of the disposal, and subject to section 9 below, the interest on the unpaid portion of the tax shall be added to each instalment and paid accordingly; but the tax for the time being unpaid, with interest to the date of payment, may be paid at any time, and shall become due and payable forthwith if—
(a ) the disposal was by way of gift to a person connected with the donor, or was deemed to be made under section 54(1) or 55(1) below, and
(b ) the assets are disposed of for valuable consideration under a subsequent disposal (whether or not the subsequent disposal is made by the person who acquired them under the first disposal).
9 Postponement of payment of tax: further provisions.
(1) Subject to the following provisions of this section, where capital gains tax is payable—
(a ) by instalments under section 8 above, and
(b ) in respect of the disposal of assets falling within paragraph (b ), (c ) or (d ) of subsection (3) of that section,
the tax shall, for the purpose of any interest to be added to each instalment, be treated as carrying interest from the date at which the instalment is payable.
(2) Subsection (1) above does not apply to tax payable in respect of the disposal of shares or securities of a company falling within paragraph (a ) of subsection (3) below unless it also falls within paragraph (b ) or (c ) of that subsection.
(3) The companies referred to in subsection (2) above are—
(a ) any company whose business consists wholly or mainly of one or more of the following,...
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