Our Partner and Head of Tax, Lisa Wilson has already commented on the potential impact to entrepreneurs following the widely expected changes to Entrepreneurs Relief (ER) and Capital Gains Tax (CGT) discount. As tomorrows budget looms, here’s our reminder of what might be in store.
Some time ago, Boris Johnson dropped a heavy hint that the government plans to ditch the current ER. This will leave some business founders facing unwelcome CGT liabilities.
Introduced in 2008, ER enables small business owners to pay a discounted 10% rate rather than the 20% due under CGT when they exit their enterprise. It was intended to encourage people to start or join new companies.
In 2018 company founders saved around £2.4 billion via ER which led the government to claim that there is no evidence that ER encourages the entrepreneurialism for which it was intended.
Johnson himself said in 2019, when the Conservative party vowed to review the rate, ‘I have to tell you the Treasury is fulminating against it because there are some people who are staggeringly rich who are using that relief to make themselves even more staggeringly rich.’
In our last ER article we highlighted the importance for business owners to take advice and plan accordingly – https://www.cowgills.co.uk/news/entrepreneurs-relief-how-long-will-it-last/
We’ll be closely following developments tomorrow and reporting them as they happen.
If you want to speak to Lisa or one of her team before them please contact us.
Disclaimer
The information was correct at time of publishing but may now be out of date.
