Final CGT rules hammer entrepreneurs
The government’s introduction of its draft CGT regime will cause uproar among thousands who have already sold their businesses
HM
Treasury & Custom’s draft legislation on its capital gains tax is set to
cause fury among business owners, after the government declined to make any
allowance for loan notes or deferred gains.
Many entrepreneurs are understood to have sold their business in exchange for
loan notes rather than cash.
Advisers had hoped that such loan notes or deferred gains would mean that
business owners could opt for the current CGT regime, when the sale was made,
rather than the forthcoming CGT regime, with an 80% higher rate in many
circumstances.
The draft legislation makes clear that the notes will be taxed under the
higher rate.
‘There should be an election,’ said Chas Roy-Chowdhury, head of taxation at
ACCA, referring to the possibility of being able to choose which tax regime to
opt for.
Accountants welcomed some decisions in the draft legislation, which they said
would benefit business owners sitting on gains of less than £1m, which could
qualify for the 10% relief rate,
the
Daily Telegraph reported.
Lisa Macpherson, PKF
national tax director at accountants, warned the details of the relief had come
too late for many business owners.
Further reading:
Lonmin bosses sell stake ahead of CGT change
S&N investors risk unwelcome CGT bill
Read
story in The Daily Telegraph