The new CGT flat rate will affect investors in varying ways,
but small businesses are likely to be the biggest losers this
time round.
The Government has now published draft legislation which
confirms that from 6 April 2008, a flat rate of 18% will be
charged on capital gains tax (CGT). The new system abolishes
taper and indexation relief accrued pre-April 1998, potentially
leaving many individuals with a far larger CGT charge than
under the current system. Other reliefs and the annual
exemption will remain available.
The impact on individual investors
There will be some relief for entrepreneurs selling a
business and for directors or employees who own more than 5% of
a trading company. To qualify, the business or shares will have
to be owned for a minimum of one year. Provided the various
conditions are met, the first £1m of gains will be taxed
at an effective rate of 10%. Any gains over this
