• 01 Apr 2016


Capital gains tax is to be cut from 28% to 20% for higher rate taxpayers and from 18% to 10% for basic rate taxpayers with effect from 6 April 2016. However, gains made on buy-to -let properties and second homes will still be subject to CGT at 28% or 18%. Carried interest will also be taxed at 28%. These extra tax rates will make CGT even more complicated as any particular gain could be taxed at up to two out of four rates.

Entrepreneurs’ relief

Entrepreneurs’ relief (ER) is to be expanded to long term investors who hold shares in unquoted trading companies. In a departure from the current conditions for ER, the investor won’t have to be an employee or officer of the company, or hold at least 5% of the share capital. The shares must be subscribed for on or after 17 March 2016 and held for a period of three years to the date of disposal, which cannot be before 6 April 2019. If these conditions are met the gain will be taxed at 10%, subject to a lifetime cap of £10 million on such gains. That cap will apply separately from the lifetime cap for other entrepreneurs’ relief gains.

In December 2014 the use of ER on the incorporation of business was restricted. The result was that ER can’t be claimed where business-related goodwill is passed to a company in which the seller or his associates hold any shares. The Government has decided to row-back slightly on that restriction, allowing ER to be claimed on the transfer of goodwill to a company, if the seller ends up with a minority share in the company of less than 5%. This change is back-dated to 3 December 2014.

Employee shareholder status

Since 1 September 2013 employees have been able to surrender a collection of employment rights in return for free shares in their employing company. These are known as employee shareholder status shares (ESS).

When an employee disposes of the ESS shares, no CGT was payable on the gain, where the initial value of the ESS shares was no more than £50,000. From 17 March 2016 the tax free gain on the disposal of ESS shares will be limited to £100,000 per person for life. This change will limit the use of ESS shares by entrepreneurs who want to lock-in a taxfree gain to shares held in their own companies.

Previous post
Next post

14 thoughts on “Capital Gains”

  1. Hey There. I found your blog the use of msn. This is a really well written article.
    I will be sure to bookmark it and come back to learn more of your helpful information. Thank you for the post.
    I’ll certainly return. asmr 0mniartist

  2. Hello, i believe that i saw you visited my site so i got here to return the desire?.I
    am trying to find things to improve my web site!I suppose
    its ok to make use of a few of your concepts!!
    0mniartist asmr

  3. Hi there just wanted to give you a quick heads up.

    The text in your content seem to be running off the screen in Chrome.

    I’m not sure if this is a formatting issue
    or something to do with internet browser compatibility but I figured
    I’d post to let you know. The style and design look
    great though! Hope you get the issue resolved soon. Cheers 0mniartist asmr

  4. I simply couldn’t go away your website before suggesting that
    I actually enjoyed the standard info an individual provide for your guests?
    Is going to be back frequently in order to check up on new posts

  5. Hey would you mind letting me know which hosting company
    you’re working with? I’ve loaded your blog in 3 completely different web browsers and I must
    say this blog loads a lot faster then most. Can you suggest a good
    web hosting provider at a honest price? Many thanks, I appreciate it!

  6. My coder is trying to persuade me to move to .net from PHP.
    I have always disliked the idea because of the costs. But
    he’s tryiong none the less. I’ve been using Movable-type on a variety of websites for about a year
    and am concerned about switching to another platform.
    I have heard good things about blogengine.net. Is there a
    way I can import all my wordpress content into it? Any kind of
    help would be greatly appreciated!

  7. Does your blog have a contact page? I’m having problems locating it but, I’d like
    to shoot you an e-mail. I’ve got some ideas for your blog you might be interested
    in hearing. Either way, great site and I look forward to
    seeing it improve over time.

  8. You really make it appear so easy along with your presentation but
    I to find this matter to be really one thing that I believe I might by no means understand.

    It kind of feels too complicated and very broad for me. I’m looking ahead for your next
    post, I will try to get the dangle of it!

  9. I do not know if it’s just me or if perhaps everyone else encountering problems with your
    website. It seems like some of the written text in your content are running
    off the screen. Can someone else please provide feedback and let me
    know if this is happening to them too? This may be a problem with my browser because
    I’ve had this happen before. Cheers

Leave a Reply

Your email address will not be published.