LONDON - Chancellor Alistair Darling watered down earlier proposals to reform capital gains tax on Thursday, saying entrepreneurs selling business assets could take advantage of a lower rate.

Darling said the CGT rate on profits below one million pounds made by anyone selling a business or part of a business would be cut to 10 percent.

"We estimate that around 80,000 business owners and investors will make disposals eligible for the entrepreneurs' relief," he told parliament.

He said the changes would cost in the region of 200 million pounds per year.

Darling announced plans to introduce a single 18 percent rate of capital gains tax in his pre-Budget report in October, scrapping taper relief which had allowed a 10 percent rate for business assets held for at least two years.

The changes were criticised by business groups, including the Confederation of British Industry and the Institute of Directors, who argued business assets should be taxed more favourably than non-business assets.

The capital gains tax reforms will take effect from April 6.