On 24 January, the Chancellor of the Exchequer announced a new capital gains tax relief. The so called “Entrepreneurs’ relief” will be targeted on the owners of small businesses, and will apply when they sell their business. It will deliver a 10 per cent tax rate for up to the first £1 million of lifetime capital gains.

The relief will also be available to all employees and company directors who invest a material stake in a qualifying company. It will take effect from 6 April 2008 alongside the rest of the capital gains tax reform package.

Draft CGT legislation on the CGT reforms is available at http://www.hmrc.gov.uk/cgt/cgt-reform-draft.pdf.