Capital Gains Tax

I wonder if there are any experts here on CGT. I have a friend who needs some advice - I've looked on the HMRC website but I find the details there quite confusing.
I understand that the current exemption is £10,600 in any one financial year. Is that the limit regardless of when the asset to be disposed of was acquired.
For example: let's say that someone bought some land in 1980 for £10,000 and then sold it this year for £30,000. The gain in actual terms would of course be £20,000, although in real terms there probably wouldn't be a gain at all, what CGT would be levied?
Reply to
Farmer Giles

Is this someone, a company that pays corporation tax? If so, when, exactly, did the purchase happen?
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What were the costs of purchase and sale? For land, there may be allowable maintenance costs.
Are they are higher rate tax payer, or close to the threshold?
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Reply to
David Woolley
Thanks for the reply. This is an individual, not even self-employed. I believe his income would be around the 30k pa area - so a bit below the higher rate threshold. My question is really about the length of time that an asset is held - ie does HMRC make any allowance for the reduction in real-term gain over time. It would seem very unfair if there is no allowance for inflation if an asset bought 20 or 30 years ago is disposed of.
Reply to
Farmer Giles

As the first reference explains, they used to make an allowance, then they froze it and introduced a different way of rewarding non-day traders, but recently they eliminated all of these for individuals.
The first sub-reference, from the first reference, goes into a lot of the history.
However acquisition and sales costs (e.g. solicitor's fees) can be set against the initial value, and, for something like land, which has to be maintained, you may be able to set the cost of maintenance off against the initial cost, although I have no personal experience of this.
Reply to
David Woolley
Also note that HMRC expect the taxpayer to do most of the calculation, so if the person doesn't understand the rules, based on the material supplied with the capital gains form, they need to consult an accountant, or at least contact HMRC for clarification.
Reply to
David Woolley
Many thanks for your help, I'm very grateful to you.
I thought that they used to make such an allowance. Still seems very unfair to me that they don't any longer.
Reply to
Farmer Giles

The great god Gordon abolished indexing.
and you get around not being able to carry forward your annual allowance by "bed and breakfasting" your assets, but it's not very easy to do with a specific piece of land (though not entirely impossible).
tim

Reply to
tim.....

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