Business Sale & Retirement

The flat rate capital gains tax charge is 28% for higher rate tax payers and 18% for others.

The principle reduction available is known as ‘entrepreneurs’ relief’, under which £10 million of capital gains is effectively taxed at a rate of 10%, rather than 28% or 18%.

The key features of the relief include:

  • it is a lifetime allowance of £10 million, so that gains realised at different times may be eligible for relief; 
  • it applies only to individuals; 
  • the disposal must represent a material disposal of an interest in a business; 
  • for shares, the individual must own 5% and be an employee/officer and it must be a trading company or group; 
  • the asset must have been held for a minimum of 1 year. 
  • As with all tax planning, care must be taken to ensure that ‘entrepreneurs’ relief’ is available.