New capital gains tax (CGT) rules will be good for some owners of SMEs and bad for others, it has been claimed.
Andrew Hubbard vice president of the Chartered Institute of Taxation (CIOT) explained that the new fixed rate of CGT was bad news for people who were planning to sell their firms as now they will generally be charged 18 per cent of the proceeds as opposed ten per cent as was previously the case.
Mr Hubbard also pointed out that the so-called entrepreneurs' tax relief will mean that people will only be charged ten per cent on the first million pounds they make but added that it was debatable how much difference this would make to people.
He said: "We're talking about a tax rate of ten per cent rather than 18 per cent… So that's £80,000 [saved]. I'd rather have £80,000 than not, but in terms of whether that's going to make a life or death difference to people, then arguably it isn't."
The new CGT rules come in to force on April 6th 2008.
