Lifetime limit reduced from £10m to £1m.
Phew.
Phew.
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Have I understood this correctly?Originally posted by ChimpMaster View Post
Entrepreneur will be using 100k of 1M allowance if he/she closes business with 100k distribution. -
No, it's the size of the distribution, not the benefit gained.Originally posted by legal View PostComment
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Will the limit be retrospectively applied?Comment
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ER available up to £1m - so you pay 10% / £100k tax on this amount.Originally posted by jamesbrown View Post
Anything above would be at 20% CGT rate.
A very fair amendment if you ask me, seeing as the majority of the relief was used above the £1m level.Comment
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2.199 Capital Gains Tax: Reduction in the Entrepreneurs’ Relief lifetime limit – From 11 March 2020, the lifetime limit on gains eligible for Entrepreneurs’ Relief (which offers a reduced 10% rate of Capital Gains Tax on qualifying disposals) will be reduced from £10 million to £1 million, in response to evidence that it has done little to incentivise entrepreneurial activity and that most of the benefit accrues to a small number of very affluent taxpayers.16 This will help ensure that the tax system is fair and sustainable while leaving over 80% of those using the relief unaffected.17 (46)
Sadly I'm not likely to be in a position where the £1M limit is likely to be an issue but this isn't fair. Biases the old who have already had a chance to claim it. They should have pro-rata'd the limit going forward depending on peoples ages.Comment
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Reading further details, this is correct.Originally posted by legal View Post
2020 - Closing company with 100k profit. 100k taxed at 10%
2020 - Relief allowance remaining - 900k.
2021 - Closing company with 950k profit. 900k taxed at 10% and 50k taxed at 20%Comment
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