With the view of encouraging investments the Chancellor has today lowered the Capital Gains Tax rates for individual with effect from 6 April 2016.

Capital Gains Tax is a tax on any chargeable gains made on the disposal or deemed disposal of capital assets (i.e. assets which are held other than assets acquired and sold in the course of a trade) by individuals, companies, personal representatives and trustees in a UK tax year (which is a year ending on 5 April).

The Capital Gains Tax rates for individuals currently in force are 18% and 28% (the tax rate depends on the total amount of the taxable income of the individual in question). They have been reduced to 10% and 20% respectively whilst Capital Gains Tax rate for companies remains at 20%. 

However, there is an important exemption to the Chancellor's reforms in respect of individuals: the cuts do not apply to gains on the sale of a residential property that is a second home or a buy-to-let property.