30-01-2008
Impact of CGT revisions explained
News by Adfero for Simply Business - independent providers of business insurance, business finance, landlord insurance, buy-to-let mortgages & commercial mortgages.
The recent revisions to capital gains tax (CGT) have been viewed as positive for small to medium-sized enterprises (SMEs), it has emerged.
George Derbyshire, the chief executive of the National Federation of Enterprise Agencies (NFEA), believes that the chancellor's recent decision to revise his plans for CGT is good for SMEs, although he does caution that the controversy caused by the issue was a "tragedy", in that it even occurred.
Under the original terms of CGT reform, the existing system of taper relief was to be ended and replaced with a flat-rate tax of 18 per cent.
Mr Derbyshire also noted that the matter may have acted to weaken confidence in the government. "It's good news that the government has listened to the small business community and revised its original plans for CGT," he said. "There is a danger that the small business community might feel its trust in the government has been eroded."
Under the most recent revisions, should a business be sold and be valued below £1 million, it will still attract a tax levy of ten per cent - anything above this value will incur tax at the higher rate.