Sanger to look at CGT alternatives

The Federation of Small
Businesses (FSB) has commissioned
Ernst
& Young’s Chris Sanger, the original architect of the capital gains tax
(CGT) taper relief scheme, to deliver alternatives which would mitigate what it
sees as the damage of chancellor Alistair Darling’s plan to scrap taper relief.

The FSB has submitted a comprehensive report to the chancellor, who is
expected to make a statement on CGT this week. UK’s biggest business
organisation argues the country’s entrepreneurial culture would be damaged and
that small business owners planning to sell their businesses to pay for their
retirement would see their tax bills rocket overnight.

The FSB has proposed a new Entrepreneurs’ Relief, which would apply to
owner-managers of small businesses as well as business angels. The proposals
would provide a 50% relief on capital gains up to a limit of £750,000, which
equates to an effective tax rate of 9%; make it easy to identify who would
qualify for the relief; encourage serial entrepreneurship and prevent
entrepreneurs from leaving the UK, which could in turn increase the overall tax
take from them; and simplify the CGT system in line with the Chancellor’s
intentions.

Further reading:

Celebrating small business success

CBI warns Darling of tax ‘rage’ over CGT