Darling abolishes predecessor's CGT relief
PKF East Anglia's tax expert claims the abolition of Capital Gains Tax taper relief and introduction of a flat rate of 18 per cent was a big surprise reversing a major relief first introduced by Gordon Brown in 1998.
Peter Harrup, a partner at the firm that has offices in Norwich, Yarmouth and Ipswich, said: "However, in abolishing the relief after 10 years, the Chancellor has done so at exactly the point when a non-business asset would qualify for its maximum relief.
"Arguably, Mr Brown built in a natural 'self-destruction' point which deprives people of the maximum benefit.
"On the whole the small business community will welcome this move for its simplicity, although in some instances it will mean paying more tax as the minimum rate of CGT currently payable is 10 per cent.
"Business owners looking to sell-up can now do so at a time of their choosing without having to hang on to earn the maximum taper relief and he has also removed the difference between business and non-business assets so, at a stroke, the whole system has become infinitely simpler for hundreds of thousands of owners of businesses.
"Given that Gordon Brown introduced Capital Gains Tax taper relief, it is clear that the new Chancellor was determined to make his own mark by removing an element of his predecessor's tax regime, which had caused significant complexities and distortions of commercial decisions."