- It applies to gains you make on the disposal of all or part of a business, or on certain disposals of related assets (eg business property) following the cessation of a business.
- The relief applies if you are a business owner or employee of trading company who holds at least 5% of the voting rights.
- The relief reduces your taxable gain by 4/9ths. Ignoring the annual exemption, this results in an effective rate of 10% on business gains (the same as used to apply after two years of business assets taper relief).
- You can make claims for the relief on more than one occasion, subject to a lifetime gains limit (to be regularly reviewed) of £2 million. This limit, announced in the 2010 Budget on 24 March applies for disposals made after 5 April 2010. The previous lifetime gains limit was £1 million and no additional relief is given for gains that exceed £1 million made before 6 April 2010. There is no minimum age requirement.
- As a general rule, the asset on which you claim relief must have been owned for at least one year.
While the new relief goes some way to answering the demands of the small business lobby, it does nothing for non-employees who invest in unquoted businesses, such as business angels, and AIM shareholders. If you fall into these categories, you used to benefit from business assets taper relief and thus usually faced a 10% effective CGT rate, but are now subject to an 18% CGT rate.Last Updated
