Capital gains tax withdrawn
London – Alistair Darling, Britain’s Chancellor of the Exchequer, has dissociated himself from his plans to relieve investors of capital gains tax. However, Darling did finally bow to business pressure – particularly from the biotech sector – by unveiling “entrepreneurs’ relief”, which offers small business owners a capital gains tax rate of 10% on lifetime gains of up to £1 million. The concession follows months of lobbying by business groups such as the CBI and The Federation of Small Businesses against the Chancellor’s Pre-Budget Report decision to impose a flat corporate gains tax rate of 18%, scrapping the 10% rate for business assets held for at least two years. The new relief will apply to anyone who owns a minimum five percent stake in a trading business if an employee, company director or other office of the company. “We estimate that around 80,000 business owners and investors will make disposals eligible for the entrepreneurs’ relief,” he told parliament. Darling said the changes would cost in the region of £200 million per year. The UK BioIndustry Association says that entrepreneur’s relief will do little to mitigate the negative impact on long-term financial investment in UK bioscience companies caused by the government’s original decision.