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Chancellor finalises changes to CGT

23rd January 2008

In this announcment today, the Chancellor Alistair Darling confirmed the changes to rules surrounding capital gains tax  as announced in October last year will come into effect on 6th April 2008.

This means a flat rate of 18% will apply from the new tax year (over the nil band rate).

However, in response to criticism from a number of business groups and small businesses, a rate of 10% is to apply on the first £1million of gains made. 18% will apply thereafter.

To qualify for this relief, the person will have to hold atleast 5% of the shares of a trading business and be an employee, director or hold another office in the company.

KWS welcomes this change to the new CGT rules after many months of uncertainty, which have made planning difficult. It will benefit business owners wishing to sell their businesses in order to retire. However, it fails to recognise that budding entrepreneurs could be put off starting their own business and "serial" entreneurs will also not benefit.  

KWS