Chancellor Rishi Sunak is considering proposals for changes to CGT from the Office of Tax Simplification as he looks to raise funds in the wake of Covid-19. Small business owners could face the biggest hit. Sunak is widely expected to align CGT rates much more closely with the income-tax system. Where most taxpayers currently pay CGT at a rate of 20% – falling to 10% for basic-rate taxpayers – higher- and additional-rate taxpayers are charged 40% and 45% respectively on their incomes. Doubling CGT rates could bring in billions.
An additional worry for small business owners is the mooted abolition of Entrepreneurs’ Relief, under which founders pay CGT at only 10% when selling their companies. While the value of this relief was reduced in March, with entrepreneurs now subject to a lifetime limit of £1m of capital gains compared with £20m previously, abolishing it altogether would still cost some owners dearly.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Selling a company simply for tax reasons may not appeal to many entrepreneurs. However, for business owners who had already been mulling a sale, it may make sense to accelerate the process.
-
Emerging markets boast top growth stocks at bargain pricesOpinion Lim Wen Loong, investment director at Ashoka WhiteOak Capital, selects three growth stocks where he’d put his money
-
Beware the bubble in bitcoin treasury companiesBitcoin treasury companies are no longer coining it. Short this one, says Matthew Partridge
-
Are venture-capital trusts worth investing in?Venture-capital trusts are a tax-efficient way to invest in early-stage companies. But are they worth the risk?
-
'It’s time to close the British steel industry'Opinion The price tag on British steel is just too high. It's time for Labour to make a grown-up decision and close down the industry, says Matthew Lynn
-
Last orders: can UK pubs be saved?Pubs in Britain are closing at the rate of one a day, continuing and accelerating a long-term downward trend. Why? And can anything be done to save them?
-
David Ellison: America's new media mogulDavid Ellison is building a mighty new force in old and new media. Critics worry that he will prove to be a Trumpian patsy. Is that fair?
-
How Next defied the odds and positioned itself as a British high-street stapleNext rose from a near-death experience and now thrives as a high-street staple. What's driving its success – and should you invest in the retailer?
-
Why investors should avoid market monomaniaOpinion Today’s overwhelming focus on US markets leaves investors guessing about opportunities and risks elsewhere
-
Can Rachel Reeves save the City?Opinion Chancellor Rachel Reeves is mulling a tax cut, which would be welcome – but it’s nowhere near enough, says Matthew Lynn
-
Global investors have overlooked the top innovators in emerging marketsOpinion Carlos Hardenberg, portfolio manager, Mobius Investment Trust, highlights three emerging market stocks where he’d put his money
