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04 Aug 2008
Entrepreneurs who sold their companies to trusts to avoid a hefty CGT bill following the introduction of the new 18% rate could face a 'nightmare scenario' of a huge tax bill but no cash to pay for it, advisers have warned.
Many business owners put their companies into trusts in agreements that depend on a buyer later coming in for the business, the Financial Times reported.
But there are fears that if a buyer does not materialise, a CGT bill will still follow but there will be no cash to pay for it.
'The Inland Revenue might well consider that you have sold a company to your trust and then effectively bought it back by tearing up the unconditional sale agreement,' the FT quoted a Big Four adviser as saying.
Stephen Herring, a partner at BDO Stoy Hayward, says that about 200 businesses were sold to trusts ahead of the CGT changes.
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Briefings
By looking at the reasons supplier statements became unfashionable, and the reasons why it is different today, this paper delves into the many benefits that can be obtained by automating the process.
Having a real and true view of your organisation’s current financial position, and having the right systems and processes in place, will ensure that you can make strong choices and are ready to capitalise on opportunities
AccountancyAgeInsight is a frequently updated resource centre for finance professionals, offering a free and easy-to-use digital library of briefings, white papers and other information resources. 
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Tail with Dog Wagging
One gets the feeling the Dog is a bit dizzy.
Posted by: spike, 05 May 2009 | 00:00