Alistair Darling, UK chancellor of the exchequer, yesterday bowed to business pressure when he announced an "entrepreneurs' relief", offering small business owners a capital gains tax rate of 10 per cent on lifetime gains of up to £1m.

The concession follows intense business lobbying against the pre-Budget report decision to impose a flat CGT rate of 18 per cent, scrapping the 10 per cent rate for business assets held for at least two years. The new relief will apply to anyone who owns a minimum 5 per cent stake in a trading business and is an employee, company director or other office of the company. The revised CGT regime will take effect on April 6.