Tax changes may affect retiring entrepreneurs

The British Chambers of Commerce (BCC) has welcomed rumours that chancellor Alistair Darling may not abolish capital gains tax (CGT) relief.

In his pre-Budget report, Mr Darling announced that the CGT system would be changed to remove taper relief and introduce a flat rate of 18 per cent.

However, following pressure from the business community, the chancellor is said to be considering maintaining relief for people selling their businesses.

David Frost, director general of the BCC said: "This proposal goes someway to meeting our concerns in that it will help those business owners that are seeking to retire."

However, Mr Frost said that "serial" entrepreneurs would be hardest hit by the introduction of the flat rate of tax.

Last month, Richard Wastcoat, UK managing director of Fidelity International, said that the proposed changes good help to boost long-term savings.

For people paying the highest rate of tax, the stock market will become a "far more attractive" investment option, he claimed.

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