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No changes for Capital Gains Tax
Thinking of selling your business?
Why now could be a good time to press ahead with your plans
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Many entrepreneurial businesses will be relieved to see the current rate of Capital Gains Tax remain unchanged in November’s Budget corporate tax consultant Pete Miller believes
There had been concerns that Capital Tax Gains (CGT) might go up and that Business Asset Disposal Relief (BADR) – the new name for Entrepreneurs’ Relief – could be scrapped, following the reports on CGT by the Office of Tax Simplification.
Instead, despite the speculation, Chancellor Rishi Sunak has left well alone. This is probably because the amount of money he can raise through putting up CGT is tiny compared to the revenue he can generate by increasing National Insurance contributions. Almost everyone pays those taxes, while only a very small number of people pay CGT.
A rise in Capital Gains Tax would have been purely ‘presentational’ – making it look to some as if the Government were coming down more heavily on ‘fat cat’ wealthy business people.
In truth, most people who are liable for CGT aren’t multimillionaire fat cats at all. They are entrepreneurs who have made their venture their life’s work over 20 to 30 years. When someone makes them an offer or they decide to retire, their businesses sell for a few hundred thousand pounds; rarely do they fetch £1m or more.
Leaving CGT alone is good news in that it removes some uncertainty in what is still an uncertain time for business. It appears that CGT rates will stay as they are for at least the next year, allowing business owners to relax for a while longer.
As we know, the pandemic has led people to consider their own mortality, with more business owners looking to bring forward their retirement plans.
So, if you’re preparing your business for sale or actually selling it, you can talk to us. We help optimise post-tax sales proceeds. For more advice, contact me on pete.miller@ themillerpartnership.com.
