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Well, the saga of Alistair Darlings CGT cock up, sorry, changes, continues.

We now have the announcement of so called “Entrepreneurs Relief” to apply from this April to cushion the blow of the new 18% unified CGT rate.

Broadly the relief provides:

– £1m of gains to be charged at 10% not 18%
– £1m is a cumulative life time total. It does not have to be used in one go, nor is it age dependent
– applies to gains on the sale of a business or part of a business, or the sale of shares in a personal trading company (presumably including ESC C16 liquidation, but thats not been expressly said)

As always the devil is in the detail.

Of course, 10% is better than 18%. However don’t believe Government spin saying that this restores the 10% rate that applied for business assets up to 5 April 2008 – three differences:

– current 10% rate is not restricted to £1m
– current 10% rate isn’t just on the sale of a business / part of a business, it also applies to selling a business asset on a standalone basis – eg a shop unit – where the business continues
– current 10% rate applies to commercial property investors – this new rate doesn’t.
– current 10% rate is in fact 10% maximum and may, on small gains have been only 5%, or on some gains would have been a hybrid between 5% and 10%. New rate is 10% fixed. EG a gain on sale of a business of £100,000 – under the current rules, if there was no other income in the year of disposal the tax would be £3,025, under the new rules £9,120 – nearly 3 times as much!

More to follow, as information becomes available.