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Equittex guide and mentor companies through the challenging process of selling their business from preparation, through negotiation to post sale. Our experience and innovative approach adds value and delivers results.
Capital Gains Tax almost doubles its existing rate
The Chancellor has recently announced an increase in Capital Gains Tax in his pre Budget report. These new rules, which come into effect in April 2008, will mean that all capital gains will be charged at a flat rate of 18% tax.
This differs to the existing arrangement which was scalable from an effective 10-40% depending on the type of asset being sold, how long it had been held etc.
This will greatly affect small-medium sized businesses who having previously benefitted from this taper relief will now be forced to pay an extra 8% on all capital gains.
The change has sparked much disapproval within the business community, with the CBI’s Director General, Richard Lambert, urging the government to review its decision and “get the enterprise agenda back on track”.
We at Equittex now urge all those who are considering selling their business to start the process now in order to complete before April 2008 and avoid paying an unnecessary extra 8% tax. To put this into context on a £2m sale this is potentially an additional £160,000 that the seller would have to pay in tax.