New Tax Relief for Entrepreneurs
Introduction
The Chancellor has just announced the proposed changes to the capital gains tax regime which were previously announced in the 2007 Pre-Budget Report. The Chancellor has introduced a new Entrepreneurs Relief.
Entrepreneurs' Relief will be available:
- to the owners of small businesses on the sale of their businesses; and
- on the sale of shares by employees and company directors who own at least 5 per cent of the voting rights in a trading company.
It will take effect from 6 April 2008 alongside the rest of the capital gains tax reform package.
Those qualifying for the relief will be taxed at a rate of 10 per cent up to the first £1 million of lifetime capital gains (after deducting the individuals annual exempt amount). Individuals will be able to claim relief for gains made on multiple occasions up to a cumulative total of £1 million. Gains in excess of the £1 million lifetime limit will attract the standard 18 per cent rate of tax.
Each qualifying gain made by an individual will therefore accrue over his/her lifetime and will be taxed at 10 per cent until the £1 million threshold has been reached. Thereafter gains will be taxed at 18 per cent and will accrue over the lifetime of the individual
It would appear that this threshold will be available for both husbands and wives though no further details have been provided.
We shall inform you of further details as and when they are available.
Ashfords is regulated by the Solicitors Regulation Authority. The information in this article is intended to be general information about English law only and not comprehensive. It is not to be relied on as legal advice nor as an alternative to taking professional advice relating to specific circumstances.
