Page 24 - Budget 2021

CAR FUEL BENEFITS

For cars with an approved CO2 emission figure, the benefit is based on a flat amount of £24,600 (£24,500 for
2020/21). To calculate the amount of the benefit the percentage figure in the above car benefits table (that is from
0% to 37%) is multiplied by £24,600. The percentage figures allow for a diesel fuel surcharge. For example, in
2021/22 a petrol car registered before 6 April 2020 emitting 118 g/km would give rise to a fuel benefit of 28% of
£24,600 = £6,888.

INHERITANCE TAX

CUMULATIVE CHARGEABLE TRANSFERS [GROSS] TAX RATE TAX RATE IN
ON DEATH LIFETIME*
2020/21 2021/22 % %
£ £
Nil rate band+ 325,000 325,000 0 0
Residence nil rate band¶ 175,000 175,000 0 N/A
Residence nil rate band £2,000,000 £2,000,000 N/A N/A
reduced if estate exceedsº
Excess above available nil No limit No limit 40 20
∞
rate band(s)

* Chargeable lifetime transfers only.
+ On the death of a surviving spouse on or after 9 October 2007, their personal representatives may claim up to 100%
of any unused proportion of the nil rate band of the first spouse to die (regardless of their date of death).
¶ On the death of a surviving spouse on or after 6 April 2017, their personal representatives may claim up to 100% of
any residence nil rate band of the first spouse to die (regardless of their date of death, but subject to the tapered
reduction).
º The reduction is £1 for every £2 additional estate over £2,000,000. As a result, there is no residence nil rate band
available if the total estate exceeds £2,350,000 (£2,700,000 on second death if the full band is inherited).
∞ 36% where at least 10% of net estate before deducting the charitable legacy is left to charity.

CAPITAL GAINS TAX

Main exemptions and reliefs

2020/21 2021/22
£ £
Annual exemption 12,300* 12,300*
Principal private residence exemption No limit No limit
Chattels exemption £6,000 £6,000
Business asset disposal relief Lifetime cumulative limit Lifetime cumulative limit
£1,000,000. Gains taxed £1,000,000. Gains taxed
at 10% at 10%
* Reduced by at least 50% for most trusts.

Rates of tax
Individuals: 10% on gains within UK basic rate band, 20% for gains in
UK higher and additional rate bands
Trustees and personal representatives: 20%

Additional rate for residential property and carried 8%
interest gains

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