The chancellor has announced that it will extend capital gains business assets taper relief to employees disposing of shares in non-trading companies, which means they could pay just 10% if they hold them for four years.
His move means that employees will not always have to consider whether the company where they work falls under the definition of a trading company.
Property investment companies, for example, are not defined as trading. Now it will apply to all employees in all companies.
Many companies, particularly listed companies, will no longer have to consider this question on behalf of their employers.
Loughlin Hickey, a partner at KPMG, welcomed the move, which was trailed in the pre-Budget report, because it would cut down red tape. He also commented that the anti-avoidance measures announced were simpler than expected.
The ICAEW said: ‘We need to check the fine print. If the definition of an employee excludes anyone related to a shareholder, many employees of small businesses will lose out.’
Making Tax Digital responses to the consultations expected in January 2017
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The UK has not followed the global trend for reducing income tax over the past two decades
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