Thursday, April 07, 2011 | Posted by: Stuart Maggs
Categories: Personal, Protecting your wealth | Tags: business, tax, entrepreneurs, budget, relief, budget2011, disposal, Entrepreneurs' Relief, selling
Last month, I wrote about the tax savings, disqualification pitfalls and client FAQs when it comes to tax planning with Entrepreneurs’ Relief. Here is a quick update on changes that occurred to the relief in the recent UK Budget.
When the Coalition Government announced its first Budget in June last year, it stressed that the economic recovery needed to be ‘enterprise-led’, and as part of the capital gains tax (CGT) package, Chancellor George Osborne expanded the existing Entrepreneurs’ Relief.
The lower 10% CGT rate was extended so that it covered the first £5m of gains realised in an individual’s lifetime, a sharp rise from the £2 million limit announced in the Labour Budget earlier that year.
Now the Chancellor has gone even further with his 2011 Budget, doubling the lifetime limit to £10 million and hence the potential tax saving to £1.8 million.
This is a shot in the arm for entrepreneurs with valuable businesses, or those seeking to sell an existing business and then start building up a new one.
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