The Budget 2016 brought good news for owner managers and shareholders in private trading companies, says Peter Rayney, who considers the new tax breaks as capital gains tax (CGT) was cut by 8% bringing the new rate down to 20%
One of the big surprises in the Budget in March was the introduction of some significant capital gains tax (CGT) breaks for owner managers and shareholders of private companies. Before the Budget, some had feared the 10% CGT entrepreneurs’ relief (ER) might be increased or withdrawn.
Yet the Chancellor delivered a firm indication that the 10% ER CGT rate remains a cornerstone for owner managers’ taxation. Furthermore, the 10% CGT rate was also extended to long-term investors in unlisted trading companies under a new style ‘investors relief’ (IR).
However, the ‘surprise’ Budget rabbit was the reduction in the headline CGT rate to 20% (previously 28%). A 28% CGT rate remains for disposals of residential property but this is not considered further here.
A
