Meg Saksida outlines two instances when individuals can get the lower capital gains tax rate on a disposal.
Although currently, we have a two-tiered capital gains tax (CGT) rate level with 18% and 28% for residential property and 10% and 20% for all other assets, the percentage charge for CGT has historically been much higher. From the inception of the CGT regime up until the late 1980s, CGT rates were a substantial 30%. They were then increased to be in sync with the top rate of income tax at a whopping 40% for the next 20 years from 1988 up until 2008.
Entrepreneurs’ relief (now business asset disposal relief (BADR)) was indeed a breath of fresh air for business owners when it was introduced in 2008 at the low rate of 10%. Although ER (or BADR) has gone through a few iterations since its introduction, it is substantially still the same percentage (10%) and is only available on the disposal of all or part of a business