After business leaders voiced their objections to the abolition of taper relief, the Chancellor introduced a new Entrepreneurs’ Relief (ER). ER may be available for disposals, reorganisations and relevant transactions taking place on or after 6 April 2008.
The main effects of this relief are:
- the first £1m of gains qualifying for relief will be charged at an effective rate of 10%;
- gains in excess of £1m will be charged at 18%;
- an individual will be able to make more than one claim for relief, up to a lifetime total of £1m of gains.
Professional bodies are calling for amendment to the draft legislation as it makes its way through the Parliamentary system. One of the issues identified with the new rules is the problem of “associated disposals” and whether or not these qualify for relief. An example would be the situation where an individual wishes to dispose of the business premises which he owns personally and lets to the business.
Please do talk to us if you are planning to dispose of your business, as planning is best undertaken early.