CGT Business Asset Taper Relief Axed To Bring Investment Firms In Line
by Stewart Douglas
The Chancellor of the Exchequer has thrown banking investments and tax planning practices in the air after the abolition of business asset taper relief in relation to capital gains tax was announced today in the 2008 pre-budget report.
The move has come amidst growing pressures for the government to act in taxing more effectively private equity bosses, which had previously been allowed to benefit from accelerated asset relief as opposed to traditional income tax payments, which many cited as unfair.
Business asset taper relief had the effect of reducing the chargeable gain to capital disposals to reflect a relief against purchasing an asset. In real terms it meant that personal business assets were chargeable at only 10% on any gains realised after being owned for two years, where otherwise 40% of the value would be payable.
Investment firms will now be liable for the new 18% rate on any gains arising from selling businesses regardless of the period of ownership, a difference from the 10% previously available from the business asset taper.
The new regime, which comes into force in April of 2008, will replace taper relief with a flat standard 18% rate of tax in order to gradually begin to achieve an equilibrium across sectors.
The move had been expected by some inside sources, at least to the extent that some revision in policy would be effected through the pre budget report in order to readdress the overly generous business asset taper relief scheme presently in place.
In other news, the move in the pre budget report to weaken inheritance tax regulations has been criticised as a mere replication of the Conservative opposition policy for reform which had proved to be extremely successful in the opinion polls in the potential run up to an election.
Add to Bookmarks:
Related stories to: CGT Business Asset Taper Relief Axed To Bring Investment Firms In Line»
No comments yet.Leave a comment
Previous: « Goldman Sachs To Report Record Profits In Face Of Credit Crunch
Next: Southern Water Takeover Bid From JP Morgan Succeeds »
Visited 340 times, 1 so far today