Content
After U, Gordon?
Ups And Downs
Gift Horse
What A Relief!
Second Thoughts?
Last One Out...
Penalty Shoot-Out
Ain't Necessarily So
Going, Going, Gone
Papers In Order?
Death And Taxes
Passing The Buck
Hire Higher
Back Taxes, Taxes Back
Options Open
Extortion?
Sick Note
Cats And Dogs
Old-Fashioned Money
I Thee Endow?
Mother's Rights
Countdown
Nowhere To Hide
|
Most investors benefit this year from a cut in the rate of CGT from their top income tax rate to just 18%. The "taper relief" that has been around for 10 years, and has just been abolished, reduced the tax rate - but most people still paid more than 18% on gains. The main losers are those who enjoyed "business assets taper relief" (BATR) and could therefore pay as little as 10% on gains. Mr Darling has allowed for some of those people so they can still pay 10% on up to £1m of gains: Entrepreneurs' Relief (ER) is available for disposals after 5 April 2008, and it has the effect of reducing gains by 4/9. The remaining 5/9 is taxed at 18% - so the charge is 10% of the number you first thought of. Simplifying CGT is never easy. It's important to appreciate that ER does not apply to everything that enjoyed BATR. You get it if you sell a trading business or part of a trading business - that's much the same. But it's different for shares: BATR was available for shareholding employees of any sort of company, and outside investors with any level of shareholding in an unquoted trading company, but you can only benefit from ER on a sale of shares if you own at least 5% of the company, it carries on a trade, and you work for it. There are also complex rules about selling assets that are used in a business on which you qualify for ER, but which you own separately. You can qualify on them as well, but there are extra conditions. If you want to know your likely CGT position under the new regime, we will be happy to explain it. If you are thinking of selling a business, it's well worth taking advice first so you minimise the tax. |
© Bayar Hughes & Co., 2010.