Questions Of Cash: Help! I can't make sense of tax rules

Q. After a positive return from equities over the last year, I would like to be reminded of the basic rules for capital gains calculations. The current rules are far more complicated than before the present Chancellor took charge.

PL, Fareham

A. Glenn Martin, a senior tax manager at Moore Stephens LLP, says: "First, calculate the difference between the actual cost of the shares and the sale proceeds, including the costs of buying and selling, such as stamp duty or commission.

"If a gain arises, deduct an allowance for inflation called indexation relief. This is calculated from published figures and is based on the month of acquisition (31 March 1982 at the earliest) and the month of sale (April 1998 at the latest). For shares bought after 5 April 1998, no indexation relief is available. You may then be able to claim taper relief, which replaced indexation allowance in April 1998. This reduces a gain according to length of ownership.

"For non-business assets, like personal shares, relief is based on the number of whole years of ownership from 6 April 1998, or date of acquisition if later. For example, after three years of ownership a 5 per cent reduction in the gain is given. For shares held at 17 March 1998, a 'bonus' year is added to the actual period of ownership. Taper relief is increased by 5 per cent for each additional year of ownership, until a maximum 40 per cent is reached after 10 years.

"Any capital losses, and any losses brought forward from earlier years, are offset against your gains, before taper relief is calculated. The net gain after deducting indexation and taper relief is then reduced by the annual CGT [Capital Gains Tax] allowance of £8,500. The remaining gain is then taxed at your marginal rate of tax."

Q. Onetel persuaded me to move to its phone service, because its line rental is cheaper than BT's. After reading in The Independent how unsatisfactory its repair service is, I decided to switch back to BT. But Onetel cut off all my services and I have now received a bill from BT of nearly £300.
AS, London.

A. Onetel says that although you told it you wanted to switch back to BT for line rental, while keeping calls with Onetel, you forgot to notify BT. While you are not happy with this explanation, you have accepted it as you have no written proof of your recollection of events.

Q. I closed my Onetel account last April, received acknowledgement from Onetel of this at the time, cleared the £2.33 outstanding balance by credit card and have since been billed by the other phone company. In January, its debt collectors, Westcot, demanded £15.71 for an unpaid balance.
DW, Derby.

A. Onetel says the £15.71 represents charges levied after the account closure for calls made while it was still live. In view of the problems, the balance has been written off and the debt collectors called off.

We have had many complaints about Onetel, which was recently bought by The Carphone Warehouse. We asked Carphone Warehouse for a statement promising to improve customer service at Onetel.

Instead, a spokeswoman said: "Customer service has always been a top priority for both Onetel and The Carphone Warehouse, and it will continue to be so now that the two companies have become one group."

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

Have you tried new the Independent Digital Edition apps?
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consultant

    £20000 - £25000 per annum + competitive: SThree: Did you know? SThree is a mul...

    Guru Careers: C# Project Team Lead

    £55 - 65k (DOE): Guru Careers: A unique opportunity for a permanent C# Develop...

    Guru Careers: Graduate Editor / Editorial Assistant

    £16 - 20k: Guru Careers: A Graduate Editor / Editorial Assistant is needed to ...

    Guru Careers: Software Developer / C# Developer

    £40-50K: Guru Careers: We are seeking an experienced Software / C# Developer w...

    Day In a Page

    Abuse - and the hell that came afterwards

    Abuse - and the hell that follows

    James Rhodes on the extraordinary legal battle to publish his memoir
    Why we need a 'tranquility map' of England, according to campaigners

    It's oh so quiet!

    The case for a 'tranquility map' of England
    'Timeless fashion': It may be a paradox, but the industry loves it

    'Timeless fashion'

    It may be a paradox, but the industry loves it
    If the West needs a bridge to the 'moderates' inside Isis, maybe we could have done with Osama bin Laden staying alive after all

    Could have done with Osama bin Laden staying alive?

    Robert Fisk on the Fountainheads of World Evil in 2011 - and 2015
    New exhibition celebrates the evolution of swimwear

    Evolution of swimwear

    From bathing dresses in the twenties to modern bikinis
    Sun, sex and an anthropological study: One British academic's summer of hell in Magaluf

    Sun, sex and an anthropological study

    One academic’s summer of hell in Magaluf
    From Shakespeare to Rising Damp... to Vicious

    Frances de la Tour's 50-year triumph

    'Rising Damp' brought De la Tour such recognition that she could be forgiven if she'd never been able to move on. But at 70, she continues to flourish - and to beguile
    'That Whitsun, I was late getting away...'

    Ian McMillan on the Whitsun Weddings

    This weekend is Whitsun, and while the festival may no longer resonate, Larkin's best-loved poem, lives on - along with the train journey at the heart of it
    Kathryn Williams explores the works and influences of Sylvia Plath in a new light

    Songs from the bell jar

    Kathryn Williams explores the works and influences of Sylvia Plath
    How one man's day in high heels showed him that Cannes must change its 'no flats' policy

    One man's day in high heels

    ...showed him that Cannes must change its 'flats' policy
    Is a quiet crusade to reform executive pay bearing fruit?

    Is a quiet crusade to reform executive pay bearing fruit?

    Dominic Rossi of Fidelity says his pressure on business to control rewards is working. But why aren’t other fund managers helping?
    The King David Hotel gives precious work to Palestinians - unless peace talks are on

    King David Hotel: Palestinians not included

    The King David is special to Jerusalem. Nick Kochan checked in and discovered it has some special arrangements, too
    More people moving from Australia to New Zealand than in the other direction for first time in 24 years

    End of the Aussie brain drain

    More people moving from Australia to New Zealand than in the other direction for first time in 24 years
    Meditation is touted as a cure for mental instability but can it actually be bad for you?

    Can meditation be bad for you?

    Researching a mass murder, Dr Miguel Farias discovered that, far from bringing inner peace, meditation can leave devotees in pieces
    Eurovision 2015: Australians will be cheering on their first-ever entrant this Saturday

    Australia's first-ever Eurovision entrant

    Australia, a nation of kitsch-worshippers, has always loved the Eurovision Song Contest. Maggie Alderson says it'll fit in fine