Brits confused about capital gains tax

Date: 26th January 2010

The majority of British people are confused about capital gains tax (CGT) or feel it is not relevant to them, new research has shown.

Data published by investment fund managers Fidelity International, has revealed that only six per cent of British people can correctly identify the current £10,100 tax-free limit which applies to all British taxpayers.

The organisation said this left 94 per cent of the population "CGT confused" and explained that the tax "can be a good thing".

CGT is charged at 18 per cent on the profit made when selling, exchanging or gifting an asset.

However, it only applies to profits in excess of £10,100 which doubles to £20,200 for married couples.

As a result of the findings, Fidelity International is now urging more UK taxpayers to be aware and take advantage of the tax break.

Paul Kennedy, head of tax and trust planning at Fidelity International, said: "It is clear from our research that CGT is a widely misunderstood and ignored tax.

"For those who pay income tax at 40 per cent or higher the rate of capital gains tax at 18 per cent may look attractive but the key for most people is wherever possible to use their tax free allowance."