Owners of small businesses selling all or part of their business will only pay capital gains tax at 10 per cent. Months of speculation about changes to Capital Gains Tax were finally clarified in the Chancellor’s 12th of March 2008 budget report.
The 10 per cent rate applies only to the first £1 million of assets sold during a person’s lifetime. This so-called “Entrepreneur’s Relief” is a response to criticism of the original proposals.
These would have treated people selling small businesses they had laboriously built up themselves in the same way as big private equity firms that just buy and sell assets – hitting both with the same high rate
Tax expert Penny Bates comments on the BBC site
More about tax and disposing of a business at the HMRC site
In other budget news, the Small Firms Loan Guarantee scheme will get extra funding to encourage the banks to lend small businesses they might otherwise consider too risky. And a new capital fund will be set up to encourage female entrepreneurs to grow their businesses.
Other measures are promised to make it easier for small firms to bid for public sector contracts.
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