Business Asset Taper Relief
was a successful measure introduced by the previous Government, and the negative impact of its withdrawal far outweighs any limited increase in tax revenues.
The most valuable capital gains tax relief available is Entrepreneurs' Relief, which replaced Business Asset Taper Relief
for disposal after April 5, 2008.
Entrepreneurs relief - this has recently replaced the much more favourable business asset taper relief
, but should you sell a business, then you still pay an effective rate of 10 per cent CGT on the first pounds 1 million worth of qualifying gains (this is a lifetime rate) Another option is to sell the business and there may be advantages in pursuing this strategy.
Key changes, which include the abolition of Business Asset Taper Relief
and Indexation Relief and the introduction of a flat rate of CGT of 18%, mean that, from April 6, the rate of CGT on business assets will increase by up to 80% for many taxpayers and by substantially more than this for those individuals realising gains of about pounds 100,000 or less.
There is also a qualifying period of just one year's ownership, compared with the two years' that had been required for full business asset taper relief
Owners eligible for full business asset taper relief
will pay just 10% on disposals made before April 6th but 18% on later sales.
If the `overage' is over land or building used by the training yard, this should qualify as a business asset and so achieve what is known as a business asset taper relief
and therefore pay capital gains tax at only ten per cent.
Business asset taper relief
exempts up to 75 per cent of any gain.
Clarify tax regulations to simplify the rules on Capital Gains Tax and Business Asset Taper Relief
, to assist shareholders in private companies.
We successfully implemented similar arrangements to those highlighted above on many clients back in March 2008 when the rate increased away from the very attractive 10% business asset taper relief
to the all encompassing 18% rate.
"If a sole trader ceases trading and puts their business premises up for sale, previous business asset taper relief
would have meant their capital gains tax was 10 per cent, and it could still be with Entrepreneur's Relief - but then again, it might instead be 18 per cent," Mr Silsby said.
"We expect plenty of owner-managed business sales to go through before the end of the current tax year so as to take maximum advantage of the existing business asset taper relief
rules before the changes announced in the budget kick in.