Capital Gains Tax
A brief history
Then Labour Chancellor James Callaghan introduces Capital Gains Tax at 30% to stop people avoiding income tax. A threshold of £9500 was set.
Income tax for high-rate taxpayers was lowered from 60% to 40%, and with basic rate payers from 30% to 25%. CGT rates followed suit, with a threshold lowered to £5000.
CGT threshold hits £6500 in the last tax year of the Tory chancellorship of Kenneth Clarke.
Labour’s Gordon Brown introduces a system where the longer you held the asset, the lower the rate of tax you paid on it. If you had owned an asset for 10 years, the rate fell from 40% to 24%.
In Alistair Darling’s first budget as Labour Chancellor he scraps the dual rate of CGT and introduces a new lower, single rate of 18%.
With no major changes to CGT in recent years, rumours are rife that classic cars could fall victim of it.