In the Pre-Budget Report in October 2007 the Chancellor, Alistair Darling, announced a series of changes to the capital gains tax (CGT) regime for individuals and trustees. These changes included the abolition of taper relief and indexation relief and the introduction of a single rate of CGT of 18%. The changes take effect from 6 April 2008.
On 24 January 2008, in response to pressure from the business community, the Chancellor announced a new ‘Entrepreneurs’ Relief’. The first £1m of gains qualifying for relief will be charged at an effective rate of 10%.
Gains in excess of £1m will be charged at 18%. An individual will be able to make more than one claim for relief, up to a lifetime total of £1m of gains.
Business leaders had been calling for the re-introduction of a form of Retirement Relief, which some of you may remember. The rules for retirement relief required you to have been in business for a number of years but the new rules are designed to be simpler:
The relief will apply to gains arising on the disposal of:
Commenting on the announcement Richard Lambert, Director General of the CBI, said:
‘This is superficially quite clever and on the surface might seem like a relief after three months of uncertainty, but even the smallest business owner will lose taper relief and indexation and be worse off.
Please do get in touch if you have any immediate concerns. We will let you have further detail once this is available.
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We can help with the preparation of accounts for all types of business. Whether you are a Sole Trader, Partnership, Limited Company, Limited Liability Partnership or a Charity, AGP has the expertise to deal with you. We help you fulfil all your obligations with HMRC, Companies House and any other regulatory body that you are required to report to.
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