The long-awaited Budget on 11 March could signal the end of various tax reliefs viewed as only benefiting the rich.
These include entrepreneurs’ relief (ER) which reduces the tax payable on the disposal of a business to 10% on up to £10m of gains. This helps those who have already made a tidy sum from the sale, not those struggling to get a business off the ground.
If you are counting on paying 10% capital gains tax (CGT) on the cash pile in your company you may need to move fast to secure the relief before it is abolished or restricted.
Under the current ER rules, you have three years after trading has ceased to liquidate the company or sell the assets and still be eligible for 10% CGT. But all the conditions for ER must be met for at least 24 months up to the date trade ceased. This may not be an obvious date so you need to pin down exactly when you stopped attempting to make sales through your business.
Only shareholders who held at least 5% of the ordinary share capital for the full 24-month period will qualify for ER, so check when shares were transferred or acquired.
We can help you check that all the other ER conditions are met.
