The chancellor tweaked relief for
small business in the Budget but serious structural problems remain,
says Richard Mannion
Between 1998/99 and 2007/08, taper relief was available to mitigate
the impact of capital gains on assets held for lengthy periods of
time.
As a result, most business owners or employees who sold their
shares or their business would have been taxed at an effective 10%
rate on their chargeable gains.
However, in the 2007 pre-Budget Report, the then chancellor
Alistair Darling decided (without notice or consultation) to scrap
taper relief. He inferred that it was too generous to partners in
private equity firms who were able to pay tax at a lower rate than
their cleaners.
Yet his proposals meant that other business proprietors would
be caught in the crossfire.
