For the year 2007/08 capital gains made by any one taxpayer are exempt up to the amount of £9,200. Taxpayers could therefore realise investments prior to 5 April to create gains of that amount without incurring a liability to taxation.

Losses made by one party to a marriage/partnership cannot be transferred to the other party. If, therefore, one party has losses and the other has potential gains, consideration should be given to transferring the assets with gains to the other party and the disposal should then be made by that party to enable the loss to be offset in the income tax year.

Any losses not utilised can be carried forward against future gain, but the annual exemption, if not used, cannot be carried forward.

If only one party to a marriage/civil partnership is liable to tax at the higher rate and it is contemplated that disposals are to be made realising a capital gain in excess of the exemption limit, consideration should be given before the sale to transferring those assets to the other party with the lower rate of tax so that the resulting gain is taxed at the lower rate.

Capital gains tax for 2007/08 will be payable on 31 January 2009. If you are considering a sale which may produce a substantial profit, a delay of that sale until after 5 April would provide an extra twelve months before the actual capital gains tax liability is required to be paid.

It should be noted, however, that for capital gains tax purposes the date of disposal is the date of the contract and not necessarily the date on which the contract is completed or the money received.

However, changes have been announced to the capital gains regime so that business asset relief and taper relief cease to have effect from 6 April 2008, but gains are charged at a flat rate of 18% instead of the gains being added to income and charged at the individual’s marginal rates. Anyone contemplating sales of assets, or holding assets with substantial unrealised gains should contact us urgently to ascertain the effect of the new regime and to determine whether sales of assets should be expedited or deferred.

Assets which have become virtually worthless can be the subject of a negligible value claim, allowing them to be treated as disposed of when the claim is made.

It is suggested that wherever there is the opportunity of offsetting such losses against other gains, all such claims should be made, unless so doing would result in gains being reduced to less than the exemption limit.

Payment of capital gains tax can be deferred if within three years after or one year prior to making the disposal giving rise to the gain, the amount of the gain is invested into a qualifying EIS non quoted trading company.

Capital gains tax is then only payable on the disposal of the new investment. Investment into a company qualifying under the Enterprise Investment Scheme (see Paragraph 1.5 above) can give rise to tax relief at the rate of 60%, if the investor is also eligible for income tax relief.

We hope you find the above of interest and as indicated earlier, will be pleased to advise you further on any specific points.