§ For managers and employees to leave steady jobs and take a chance by going into business on their own, the risk must be worth while. At 40 per cent, our top rate of income tax is the lowest in the European Union, and I intend to keep it that way, but our capital gains tax regime still bears disproportionately on the successful entrepreneur.
§ In 1991, we increased the capital gains tax relief for business people who sell up on retirement, by providing a complete exemption from capital gains tax on the first £150,000 of capital gains and a half exemption on the next £450,000. I now propose to increase those limits to £250,000 and £750,000 respectively. By rewarding those who have been successful in the past, that measure will encourage potential entrepreneurs and creators of businesses in the future.
§ In addition, I propose that any individual facing a capital gains charge should be able to defer the tax indefinitely by reinvesting those gains in an unquoted trading company.