Given the potential tax savings and its potentially wide application, tax advisers will need to understand and advise on the new investors’ relief for investments in trading companies or trading groups, write Dipan Shah and Nick Baker (PwC).
Finance Bill 2016 contained several unexpected surprises for investors in companies. As well as the reduction in the capital gains tax rate from 28% to 20% (other than for residential property or carried interest) the Bill also included a new investors’ relief (IR) for investments in trading companies or trading groups. This new relief reduces the rate of tax payable on capital gains to 10% where newly issued shares are held for at least three years and can cover up to £10m of lifetime capital gains.
At first sight the new relief appears to be closely related to entrepreneurs’ relief (ER)...
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Given the potential tax savings and its potentially wide application, tax advisers will need to understand and advise on the new investors’ relief for investments in trading companies or trading groups, write Dipan Shah and Nick Baker (PwC).
Finance Bill 2016 contained several unexpected surprises for investors in companies. As well as the reduction in the capital gains tax rate from 28% to 20% (other than for residential property or carried interest) the Bill also included a new investors’ relief (IR) for investments in trading companies or trading groups. This new relief reduces the rate of tax payable on capital gains to 10% where newly issued shares are held for at least three years and can cover up to £10m of lifetime capital gains.
At first sight the new relief appears to be closely related to entrepreneurs’ relief (ER)...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
