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Farmers averaging and the higher rate of CGT via loss claims

For 2010/11 and subsequent tax years there is a specific new provision.

The provision is: whereby gains made by a taxpayer are subject to Capital Gains Tax (CGT) at different rates, allowable capital losses and the CGT annual exemption may be deducted from those gains in a manner most beneficial for the taxpayer (Finance (No 2) Act 2010 para 3, schedule 1 inserting 4B Taxation of Chargeable Gains Act 1992 (TCGA 1992).

For those taxpayers reluctant to pay the increased 28% as opposed to 18% rate there is scope for using ‘allowable capital losses’ via the routes of selling assets to realise losses and/or making negligible value claims.  Tax planners need to look at CGT loss realisation leading to 5 April 2012.