This means that the rate remains at 10% to the extent that any income tax rate band is available after 20% thereafter.
Higher rates of 18% and 28% apply for certain gains, mainly chargeable gains on residential properties, with the exception of any element that qualifies for Private Residence Relief.
There are 2 specific types of disposal which potentially qualify for a 10% rate up to a lifetime limit for each individual:
- Business Asset Disposal Relief (BADR) formerly
known as Entrepreneur’s Relief – this is targeted at directors and employees of
companies who own at least 5% of the ordinary share capital in the company,
provided other minimum criteria are also met, and owners of unincorporated
- Investment Relief – the main beneficiaries of this relief are external investors and unquoted trading companies that have newly subscribed shares.
The lifetime limit for BADR was reduced from £10 million to £1 million for BADR qualifying disposals made on or after 11 March 2020. Investor’s relief continues to have a lifetime limit of £10 million.