Darling offers entrepreneurs’ relief, revises CGT proposal

Source: Exec Digital UK

Date :24/01/2008 13:37:36

Chancellor Alistair Darling finally bows to business pressure as he unveils an “entrepreneurs’ relief,” offering small business owners a capital gains tax rate of ten percent on lifetime gains of up to £1 million.

The concession follows months of lobbying by business groups such as the CBI and The Federation of Small Businesses against the Chancellor’s Pre-Budget Report decision to impose a flat CGT rate of 18 percent, scrapping the ten percent rate for business assets held for at least two years.

Revised CGT

The new relief will apply to anyone who owns a minimum five percent stake in a trading business and if an employee, company director or other office of the company.

"We estimate that around 80,000 business owners and investors will make disposals eligible for the entrepreneurs' relief," he told parliament.

He said the changes would cost in the region of 200 million pounds per year, reducing the forecast £900m annual revenue generated by the CGT reforms.

The revised CGT regime will take effect on April 6.

January 24, 2008