The following was posted on SME Plus blog regarding today's announcement by the Chancellor. 

The Chancellor has just announced a new capital gains tax relief for entrepreneurs to ameliorate the effect of the new 18% flat rate that comes into force from 6 April.

The relief will be targeted to the owners of small businesses as well as employees and directors who, very broadly, hold at least 5% of the shares in a trading company. The relief is said to apply on the sale of the shares.

The relief reduces the tax rate on the first £1 million gains but as a lifetime limit. For gains over £1 million the standard rate of 18% will apply.

Further details are promised but at the time of writing this are still not available. The details so far available can be seen in full at http://www.hm-treasury.gov.uk/newsroom_and_speeches/press/2008/press_05_08.cfm  

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It is being reported by the Daily Telegraph that the Government is considering a number of options relating to concessions on the new capital gains tax regime. One of these seems to be the ability to “opt for a deemed sale” before 5 April 2008 to lock into the favourable business taper and indexation relief. Presumably this would be a way of crystallising a gain without resorting to such devices as trusts.

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