The Capital Gains Tax (Annual Exempt Amount) Order 2011

This Order specifies £10,600 as the exempt amount for the tax year 2011-12 by virtue of section 3 of the Taxation of Chargeable Gains Act 1992 (c. 12) (“TCGA 1992”), unless Parliament otherwise determines. Section 3(1) of the TCGA 1992 provides that an individual is chargeable to capital gains tax for a year of assessment only on the amount by which his taxable amount for the year exceeds the exempt amount.

By virtue of the Capital Gains Tax (Annual Exempt Amount) Order 2010 (S.I. 2010/923) the exempt amount for the tax year 2010-11 was set at £10,100 (being the same amount as set for 2009-10 by the Capital Gains Tax (Annual Exempt Amount) Order 2009 (S.I. 2009/824)). The amount of £10,600 is the amount for 2010-11 increased by the amount of the percentage increase in the retail prices index for September 2010 over that for September 2009, and rounded up to the nearest £100 in accordance with section 3(3) of the TCGA 1992 (as amended by section 83 of the Finance Act 1993 (c. 34)).

Under section 288(2) of the TCGA 1992, “retail prices index” has the same meaning as in the Income Tax Acts; and “retail prices index” is defined in section 989 of the Income Tax Act 2007 (c. 3) (as amended by paragraph 16 of Schedule 3 to the Statistics and Registration Service Act 2007 (c. 18)). The retail prices index for September 2010 is 225.3 and for September 2009 is 215.3 (based on January 1987 as 100) (see Table RP02 (a National Statistics Publication)). This publication can be found at http://www.statistics.gov.uk/downloads/theme_economy/Rp02.pdf. Percentage changes in the RPI over 12 months are given in Table RP04 (http://www.statistics.gov.uk/downloads/theme_economy/Rp04.pdf).

In line with government commitments, a Tax Information and Impact Note has not been prepared for this instrument as it gives effect to a previously announced policy and relates to routine changes to allowances.