30th November  2007

Local business owners currently planning to sell up and retire on the proceeds could be in for a disappointment!

“There are many people in the area who have worked hard for years to build up their businesses,” says Matthew Gilmartin of local accountants, Sage & Co.

“They’ve been looking forward for the day when they would sell up and invest the cash into a comfortable retirement. Thanks to the Chancellor, some will have a rather less comfortable retirement than they had expected.”

According to Matthew, the Government has changed the goalposts yet again on their ever changing Capital Gains Tax arrangements and some owners selling after April next year could see a big increase in their CGT liability.

Matthew explains: “Individuals selling businesses and certain properties could expect to pay a minimum of 10% Capital Gains Tax. However, under the new proposals they could pay as much as 18%.”

Matthew added:  “Despite the offer of business relief to exempt the first £100,000 of any such gain, the arrangements are of little help to businesses and families.”

As an example, a 40% taxpayer selling a business and realising a taxable gain of £500,000 under the current system would pay £50,000 (excluding an individual’s annual exemption). The proposals due to come into force on 6 April next year would mean a liability of £72,000!

Matthew continued: “This is bad news for some people, and it shows that The Chancellor is doing nothing to help individuals who have helped themselves and other through building their business.”

Matthew’s advice? “Those who have already decided to sell up should try to conclude the sale before 5 April. Those looking to sell investment properties should consider holding off until after 6 April 2008.”

Business people wanting more information can contact Matthew Gilmartin on 01745 586360.