Most business owners know that they can sell shares in a trading company and pay a 10% rate of Capital Gains Tax. This is because of a useful tax break known as 'Entrepreneurs' Relief'.
With the upcoming election, the country still holding huge debts and the unpopularity of the current austerity measures, how will this relief be viewed going forward?
That may depend on the cost of the relief to the government. A recent report by the National Audit Office has found that Entrepreneurs’ Relief is estimated at costing £2.9bn a year: more than the forecast of £900m originally expected. Would a reduction or removal of this relief be seen by a new government as a relatively painless way to increase their income? This may be seen by the majority of people as a preferred route to cuts in public spending.
Whilst, no one knows what is going to happen to Entrepreneurs' Relief, there is an element of uncertainty in the air with many commentators expecting some reform or reduction in this tax break. Now might be the right time to think about taking advantage of this generous relief? After all, for many business owners, disposing of the shares in their business is a once in lifetime event and therefore it is very important that net proceeds are maximised.
At Shorts we have 11 Chartered Tax Advisers who have a detailed knowledge of Entrepreneurs' Relief and the conditions attached to this - they work hand in hand with the Corporate Finance team to ensure that the vendor and their tax position are at the centre of a transaction and that tax is minimised.
If you would like to find out more about how this may affect you, please contact Scott Burkinshaw or Andy Ryder
Tags: Corporate Finance, Business Taxes
