PracticeAccounting FirmsFirms report brisk business ahead of CGT change

Firms report brisk business ahead of CGT change

Accountancy firms are dealing with a deluge of family businesses rushing to sell up in lead up to CGT change

A rush by family businesses to sell up before before the April 5 rise in
capital gains tax has lead to an increase in work for firms across the board.

The 10% levy on most of capital gains increases to 18% under a change to HM
Treasury’s rules.

‘(Business) is about 50% up on this time last year, which was also busy,’
Stephen Quest, tax partner at
Grant Thornton,
told The Independent. ‘We’ve seen a real frothing up. Sales are being
triggered and brought forward, typically of family-controlled businesses and
across a wide range of values, anything from £10m up to £150m. Prices have come
down a bit. They’re often selling to private equity.’

There is also a feeling businesses which have been built up over decades, or
generations, are forced to sell out undervalued. Having held out for a definite
decision from the Treasury, these business owners are faced with rushing the
sales through.

Kevin Nicholson, head of entrepreneurs and private companies at
PricewaterhouseCoopers, said: ‘They resent
doing things in a rush. Some are angry that they’ve built up companies that were
intended to be a pension pot on the basis of a 10% tax rate. Suddenly it’s 18%.
They’re wondering what the next change will be, and the next. There’s anger and
frustration at that.’

Further reading:

Brown urged to ditch homeowners CGT cut

PM’s adviser warns on tax competitiveness

Read
story in The Independent

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