UK Investors Fight Complex Capital Tax Regime

by Robert Lee, Tax-News.com, London

14 October 2008

Despite the UK Revenue's removal of taper and indexation relief with effect from April this year, many investors aren't expected to benefit from the administrative ease of the new simplified capital gains tax regime until after April 2009.

This is because investors filing their year end 2008 tax returns in time for the October 31 paper submission deadline are still faced with working their way through HMRC's complicated pre-2008 share identification rules and indexation and taper calculations.

A joint survey by timetotrade and the UK Shareholders Association (UKSA) at the beginning of this year revealed that 84% of investors owned shares that benefited from accumulated tax breaks, such as indexation allowance and the enhanced taper relief applicable to business assets and AIM listed stocks.

Many investors disposed of these assets in the lead up to April 2008, specifically to take advantage of the accumulated tax reliefs. However, those same investors are now faced with the onerous task of actually calculating their gains.

Timetotrade has developed a Capital Gains Tax calculator to help investors manage and calculate their Capital Gains Tax liabilities for a variety of investment types.

The calculator supports UK share identification rules, indexation allowance and taper relief calculations; generates a fully completed Capital Gains Tax return form SA108 which investors can print off and submit to the Revenue; as well as providing a full breakdown of the supporting calculations that are now required by HMRC.

Dary McGovern, Managing Director of timetotrade commented:

“Anyone who has tried to work their way through the legislative mine-field that is the pre-2008 UK Capital Gains Tax system will know that it is arguably the most complicated Capital Gains Tax regime in the world."

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