Chancellor Alistair Darling has announced his revised Capital Gains Tax (CGT) plans, confirming that a single 18 per cent rate is to be implemented and taper relief abolished as of the 1 April 2008.
A 10 per cent rate will, however, be applied to gains of up to £1 million, in a bid to help entrepreneurs.
Commenting on the plans, EEF said that the new plans proved useful as an incentive for investors in business assets, but that they will still inflict an additional £700 million tax bill per year on business itself.
“[The] announcement is a helpful concession. However… business [is] still being used to fill a hole in the government’s finances,” said Martin Temple, EEF chairman.
Richard Lambert, director-general of the CBI, described the changes as “superficially quite clever” and that they “might seem like a relief after three months of uncertainty” but that “even the smallest business owner will lose taper relief and indexation and be worse off than before October.”