Are You an Entrepreneur?

A completely new capital gains tax regime is set to come in on 6 April 2008. The proposals are that as from that date all gains made by individuals will be taxed at 18% with no indexation relief or taper relief, unless they qualify for the proposed ‘Entrepreneur’s Relief’. That relief is set to cover the following:

• Sales of shares in a trading company if the seller holds 5% or more of the share capital and has been an officer or employee.
• Sale of all or part of an unincorporated business or partnership.
• Sale of assets following the cessation of a business.

It will not cover the following assets which currently qualify for business asset taper relief:

• Sales of minority holdings in companies where you work, such as share scheme disposals.
• Sale of assets that are used by an unconnected business.

Legislation will be drafted shortly, however in the meantime if you have the following assets you may wish to consider disposing of them before 5 April 2008:

• Assets that have been held for a long time, e.g. before the early 1990s.
• Assets currently let to a company, partnership or business in which you have no stake.
• Shares in your employer company where you hold less than 5% of the issued share capital.

If you have any concerns please contact us immediately as time is of the essence!