A boost for investors – but not in residential property

For disposals after 6th April 2016, the higher rate of capital gains tax (‘CGT’) has been reduced from 28% to 20%, and the basic rate reduced from 18% to 10%.

However, the 28% and 18% rates continue to apply (inter alia) to carried interest and chargeable gains on residential property that do not qualify for the principal private residence exemption, such as holiday homes and let properties.

In addition, the 10% CGT rate for gains qualifying for entrepreneurs’ relief has been extended to external investors in unlisted trading companies. This new “investors’ relief” is available to individuals who subscribe to new shares in unlisted trading companies on or after 17th March 2016, and who hold those shares for at least three years from 6th April 2016.

The moves are intended to “ensure that CGT provides an incentive to invest in companies over property”.

For more information, please contact the partner having responsibility for your affairs, or any partner in the Private Client Department here.