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Date of publication: January 2012
For gains on or before 22 June 2010, Capital Gains Tax is charged at a flat rate of 18 per cent.
The following Capital Gains Tax rates apply to gains after this date:
Entrepreneurs' Relief allows individuals and some trustees to claim relief on qualifying gains made on the disposal of any of the following:
The relief applies for the years 2008-09 onwards. There is a maximum lifetime limit of Entrepreneurs' Relief you can claim.
The relief effectively reduces the rate of tax to 10% for gains up to a lifetime maximum.
There's a maximum lifetime limit on the amount of Entrepreneurs' Relief you can claim on qualifying gains. The limit is:
An actual claim must be made for the relief within 22 months from the end of the tax year in which the disposal occurred.
A husband and wife may both claim so long as they both satisfy the eligibility criteria.
To be eligible for the relief an individual must be:
These conditions must be met for a period of one year prior to the date of the disposal, or to the cessation of trading if appropriate.
If you dispose of shares, in a share for share exchange, capital gains tax is normally deferred on the disposal of the original shares until the disposal of the replacement shares. In this instance, if you exchange shares that qualify for entrepreneurs’ relief for shares that do not qualify then you will lose entitlement to the relief. You may therefore prefer to dis-apply the provisions relating to exchange of shares and pay the capital gains tax on the disposal of the original qualifying shares straight away in order to benefit from the relief.
This guide does not contain a full statement of the law and it does not constitute legal advice. Please seek legal advice if you have any questions about the information set out above.