| The proposed changes
announced in the Pre-Budget Report to the
capital gains tax (CGT) system are
radical. Taper relief for CGT will be
abolished for disposals on or after 6
April 2008. Other changes to the CGT
system include introducing a flat rate of
CGT of 18% and abolishing indexation, an
allowance for inflation.
Last month we reported that the
Chancellor, Alistair Darling, had said at
the CBI conference that he would ‘publish
final proposals’ in December 2007. There
have been many rumours of changes to the
proposals including the introduction of
some form of retirement relief, with the
figure of £100,000 being mentioned by
several sources.
Alistair Darling has now said that
final proposals will not be issued before
the New Year, which has disappointed many,
as it gives little time to plan
effectively before the introduction of the
new rules.
On 17 December 2007 the Director
General of the CBI, Richard Lambert,
expressed disappointment at the
Chancellor's decision to postpone an
announcement.
Richard Lambert said:
‘We are glad that the Chancellor is paying
attention to the submissions he has
received from the business community, but
he needs to get on with this decision
urgently, as he promised at the CBI's
conference a fortnight ago.
People need to be able to make decisions
about their businesses - whether to
invest, or whether to sell up. This
uncertainty mustn't be allowed to
continue.’
The proposed changes will generally
increase the amount of tax payable by
individuals who own assets that currently
qualify for full business asset taper
relief but everyone has different costs
and entitlements to reliefs, so it is
difficult to speak in generalities.
If the government does introduce a form
of retirement relief then it may be
beneficial to retain business assets and
dispose of them on or after 6 April 2008
depending on the amount of the relief, the
conditions which have to be met and how it
is calculated.
We will continue to keep you informed
of developments. However if you have any
concerns please do get in touch.
Internet link:
CBI press release |
