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Capital Gains Tax good for some

By on February 21 2008

The new rules surrounding Capital Gains Tax (CGT) due to be implemented in April will be "good news for some and bad news for others", one business expert has claimed.

Andrew Hubbard, vice president of the Chartered Institute of Taxation (CIOT) and tax technical director for Tenon Group, states that the fixed rate will be bad news for those SMEs who were going to sell out their business at a ten per cent tax charge.

Hubbard commented: "If you're in a position where you've got something to sell, what it's effectively going to mean is that the first £1 million of that gain will be taxable at ten per cent.

So for somebody who builds up a small business and sells it on for half a million pounds, then that's quite an attractive thing."

In his pre-Budget report last year, Mr Darling announced that as of 6th April 6th 2008, CGT would no longer be tapered but would rather be charged at a fixed rate of 18 per cent.

He later introduced entrepreneur's relief, allowing the first £1 million of a company's sale to be charged at the lower CGT rate of ten per cent.

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