Business owners contemplating a share sale may wish to bring this forward

Entrepreneurs’ relief may be significantly amended or abolished in the forthcoming Budget, as early as from the 11 March 2020. Entrepreneurs relief consists of the reduced 10% capital gains tax rate on the disposal of qualifying assets, principally certain shares in unquoted trading companies.

The Prime Minister has been quoted as saying that the Treasury is vehemently against entrepreneurs’ relief, which simply makes the “staggeringly rich” even richer.

Entrepreneurs’ relief allows individuals to benefit from a 10% capital gains tax rate, rather than the usual rate of 20% for higher rate taxpayers, with a £10m lifetime allowance.

Emma Bailey, tax partner at Fox Williams said: “Although the amendment or abolition of the relief, and the timing, is not yet guaranteed, any business owner who is already contemplating a share sale should consider the impact of the potential change. Delay beyond Budget Day risks the sale being taxed differently from the current entrepreneurs’ relief regime and in a way that is likely to cost more.”

For further information, please contact tax partner Emma Bailey or tax director Jo Varia.


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