Entrepreneurs’ Relief (ER) was put in the spotlight by both Labour and the Conservatives during the election campaign at the end of last year with Labour saying they would remove it completely and the Conservatives proposing a review and reform but they didn’t submit any detailed proposals. With the Budget looming on 11th March it would seem that changes to ER are likely.
The Treasury has been highlighting for a number of years that ER has been costing an increasing amount and the Government is thought to have been influenced by recent research by The Institute of Fiscal Studies (IFS), which suggested that not taxing these capital gains at the full rate of 20% is costing the Treasuring £2.4bn per annum. Under the current ER a business owner can make gains on disposing of their business at just a 10% rate of tax on the first £10m of total gains since 2008. Without ER, a business owner would pay a top rate of 20% capital gains tax.
We will be watching with interest on 11th March to see how the Budget will affect your business.
For more information on all Corporate legal matters contact our team on 01484 821 300 or visit Corporate & Commercial Law