Taxing Times

The Chancellor's decision to change the Chapital Gains Tax (CGT) rate to a flat 18% and abolish taper relief seems like a gut reaction to the fact that private equity bosses are only paying 10% on their 'carry' on successful investments. Caught in the cross fire are entrepreneurs that now are going to have to pay nearly twice as much tax on exit. The fact that the Enterprise Investment Scheme (EIS) allows up to £400K of any gain to be rolled over into a new venture softens the blow, but these changes that come in in April 2008 give a big incentive to exit before then!