ARTICLE · 20 JULY 2010

Entrepreneurial Enough?

CMS Cameron McKenna Nabarro Olswang

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Are you planning on disposing of your business in the foreseeable future? If so, it may be possible, with some basic tax planning, that you could save nearly a third of your capital gains tax bill on up to £5 million worth of gains.

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Richard Croker

Aaron Fairhurst

Are you planning on disposing of your business in the foreseeable future? If so, it may be possible, with some basic tax planning, that you could save nearly a third of your capital gains tax bill on up to £5 million worth of gains.

On 22 June 2010, the Chancellor announced that the rate of capital gains tax was to be raised from 18% to 28% for individuals with total income and gains in excess of the basic rate band. However, at the same time, the lifetime limit on Entrepreneurs' Relief (which reduces the rate of capital gains tax for individuals to 10% in certain circumstances) was extended from £2 million to £5 million worth of gains.

This reduced rate is available on the sale of certain qualifying business assets and shares in a trading company. In the case of shares, the relief is available provided that, for at least 12 months prior to the date of disposal, the individual has (a) held 5% of the issued share capital (carrying 5% of the votes) and (b) been an

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