How to defer a capital gain
If you have made a capital gain that will be taxed at the new higher rate of 28%, you might decide to defer it to a later tax year.
This will reduce the tax payable if your future marginal rate of capital gains tax (CGT) is lower, or you have more losses or available annual exemption in that later year.
Where the gain arose from disposing of a business asset used for your trade, you can defer the gain by investing the net proceeds in another qualifying business asset in the period one year before to three years after the date of disposal.
Alternatively, you could defer your gain by subscribing for Enterprise Investment Scheme (EIS) shares. This acquisition also needs to be made within the same four-year period. But you only need to reinvest the amount of the gain you want to defer, not the net proceeds from your disposal.
You have over five years after the EIS shares are issued to claim the deferral. However, you must pay any CGT due for 2010/11 by 31 January 2012, so in practice your decision period is shorter. Of course you could pay the 2010/11 CGT on time, and then reclaim that tax once your deferral claim is processed.
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