Will I pay Capital Gains Tax on returns from my investments?

Not on the first £9,200 of returns in the tax year 2007/08, thereafter you will have to pay CGT. The annual CGT exemption is different for trusts and investments in tax-free wrappers are not subject to CGT so you should consult your tax adviser or investment manager if you are uncertain of your own tax position.

The Government has proposed changes to the CGT regime in its 2007 Pre-Budget Report, one of which is a flat rate charge of 18 per cent and an end to taper relief, which used to mean the less tax was paid the longer the investment was held.

These changes take effect from April 2008.