capital gains

Entrepreneurs’ Relief

Capital Gains Tax (CGT) is chargeable on the proceeds received for the disposal of chargeable capital assets by UK residents. For tax year 2012/13, a basic rate taxpayer will suffer CGT at 18%, and for an individual with taxable income or gains over £34,370 (and so subject to higher or additional rates of income tax) the CGT rate is 28%. However, Entrepreneurs’ Relief (ER) reduces the rate of capital gains tax payable on disposals of “qualifying business assets” down to 10%. This relief can apply to the first £10 million of qualifying gains that an individual realizes in his or her lifetime, and because the top rate of CGT that would otherwise be paid is 28%, ER can currently give a total potential tax saving of £1.8 million. ER is a very important relief for ... »