CGT retirement windfall to end soon
Entrepreneurs and small business owners, aged 50 and over, wanting to take advantage of special capital gains tax relief, must sell their businesses soon, before the law is updated.
Under current legislation anyone selling a business at the age of 50 or older is entitled to 100% relief on gains up to £50,000 and 50% relief for gains between £50,000 and £200,000.
However, this rule will be scrapped on the 5 April 2003, and replaced by taper relief which reduces the capital gains tax rate depending on how long certain assets have been owned.
Patrick Stevens, tax partner at Ernst & Young, cautioned at owners selling their businesses just to take advantage of the current rule:
‘Selling the business should be a decision you make because the timing is right. The tax position may be part of your calculation but it shouldn’t drive the outcome,’ Stevens said.