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Undiluted Taper

12 September 2000 / Peter Rayney , Bdo Stoy Hayward
Categories: Comment & Analysis
Peter Rayney, Tax Partner with BDO Stoy Hayward, illustrates some vagaries of taper relief planning.

Peter Rayney Tax Partner with BDO Stoy Hayward illustrates some vagaries of taper relief planning.
Many passive (i.e. non-working) shareholders are likely to suffer a dilution in their overall taper relief as a result of the period between 6 April 1998 and 5 April 2000 counting as a 'non-business' period for taper relief purposes. The gain on their eventual disposal would be apportioned between this 'non-business' period and the post-5 April 2000 period which will invariably qualify as a 'business' period under the extended Finance Act 2000 business asset definition. A working shareholder holding less than 5 per cent of the voting rights would also suffer from the same problem. Pre 1998 shareholders would have to wait twelve years before the non-business period is completely disregarded for tapering purposes.
A 'tainted' shareholder may improve his taper position by transferring the shares for example ...

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