Member Article

Darling gives and takes in the North East

The Chancellor’s Pre-Budget Report has created winners and losers across the North East, according to financial experts from PricewaterhouseCoopers Newcastle.

As a result of changes to the capital gains tax, all gains realised by individuals, trustees and personal representatives will be subject to a flat rate of 18%. Previously there had been a differential rate between business and non-business assets. The rate on business assets held for more than two years will increase from 10% to 18% but there is a significant reduction in the rate for non-business assets such as second homes and quoted shares.

Graham Redman, partner and head of tax PricewaterhouseCoopers LLP in the North East said: “This will be a bitter pill for those that had built up their business with the expectation of selling out with only a 10% tax charge. It will be interesting to see how many of these businesses in the North East are sold in the period up to 5 April.

“Conversely those who held non-business assets such as many properties will see their tax rate fall from 24% to 18%. Similarly taxpayers who would have faced the 40% tax charge on assets like buy-to-let portfolios and quoted share portfolios will be pleased by these new measures.

“As with all changes to the tax regime there will be significant winners and losers. The main losers would appear to be the entrepreneurs and private business owners that government has been seeking to encourage in recent years.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .