Page "Capital gains tax" Paragraph 122

Individuals paid capital gains tax at their highest marginal rate of income tax ( 0 %, 10 %, 20 % or 40 % in the tax year 2007 / 8 ) but from 6 April 1998 were able to claim a taper relief which reduces the amount of a gain that is subject to capital gains tax ( reducing the effective rate of tax ), depending on whether the asset is a " business asset " or a " non-business asset " and the length of the period of ownership.

Taper relief provided up to a 75 % reduction ( leaving 25 % taxable ) in taxable gains for business assets, and 40 % ( leaving 60 % taxable ), for non-business assets, for an individual.

Taper relief replaces indexation allowance for individuals, which can still be claimed for assets held prior to 6 April 1998 from the date of purchase until that date, but was itself abolished on 5 April 2008.