Autumn Statement cancelled – Enjoy CGT while you can!
The Government cancelled the Autumn Statement this week providing a welcomed sense of relief to business owners looking to sell. A small window of opportunity now exists to sell before the predicted threat of increased Capital Gains Tax (CGT) rates.
Following changes to the Entrepreneurs’ Relief scheme announced in March 2020 and the increased public spending during the COVID-19 crisis, the Government was expected to announce an increase in CGT with potential alignment of CGT rates with income tax rates. This would have meant that shareholders selling a business would be taxed at up to 45% for a disposal rather than the current rates of up to 20%.
Cancellation of the Autumn Statement has given business owners the benefit of a few more months to take advantage of one of the lowest tax regimes entrepreneurs and business owners have ever enjoyed. Therefore, if you are contemplating a transaction in the short to medium term, whether it is a full or partial exit, there is a strong case to investigate bringing this forward and concluding a transaction within the current tax regime in advance of the next Budget.
In addition to cancelling the Autumn Statement, the Government has also announced new support measures for businesses suffering from the COVID-19 crisis including an extension of the Coronavirus Business Interruption Loan Schemes application deadline until 30th November 2020 and a new job support scheme. You can find more information here.
Please feel free to contact our team to discuss your particular circumstances if you require assistance with acquisitions, disposals or fundraisings.
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