Heavy pressure from small businesses has brought and significant concessions from Chancellor Alistair Darling on his capital gains tax plans.
He told Parliament last week, that the first £1m of gains will be taxed at 10 per cent rather than the 18 per cent announced in the pre-Budget report. Gains over £1m will be taxed at 18 per cent.
The Chancellor said that under the revised regime, 90 per cent of the expected 80,000 disposals eligible for relief next year would have their entire gains taxed at 10 per cent.
Gains made on separate occasions will also qualify for the 10 per cent rate of taxation until the cumulative total reaches £1m.
Federation of Small Businesses chairman John Wright said: “The relief will go some way to protecting entrepreneurship in the UK. We welcome these plans but the way that the whole issue has been handled has seriously eroded small businesses’ trust in the Government.”
Interbay Commercial operations director Colin Bell says: “This is a welcome respite for entrepreneurs and owners of small businesses. Our commercial mortgage borrowers are typically owners or investors of small shops, restaurants or guest houses and the increase to a flat 18 per cent capital gains tax was extremely worrying for them.
“Now they have some comfort that, when they come to sell their businesses, they will not be taxed as heavily.”