Tax U-turn should help retirement plans
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If you are planning to use the sale of your business to fund your retirement, there’s some good news on the way. Changes to capital gains tax expected to be announced by the Chancellor should see you retain all of the money you make up to an expected threshold of £100,000.
The details have not yet been fully worked out, but The Daily Telegraph is reporting that the decision has been made to make the change. Under the government’s previous plans the owners of small UK businesses wishing to retire were faced with stiff tax bills brought in recently to stop abuses by big private equity companies.
The relaxation in the rules - which may well only apply to business owners over the age of 50, follows a campaign against the unfair way capital gains tax would hitting ordinary small business owners with no connection to the private equity sector.
Details of the new scheme are still sketchy, but the Daily Telegraph is reporting that the first £100,000 made on a business sale are likely to be exempt, and thereafter the gain will be taxed at 18 per cent.
To prevent this concession being abused by big City firms, it is likely to be available only a one-off basis to individuals setting up a ‘retirement relief fund’ - details to be announced.
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