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Experts’ warning on tax reforms
Jan 9 2008 by Tony McDonough, Liverpool Daily Post
TWO Liverpool-based tax experts are warning that small firms face difficult decisions in 2008 because of radical reforms of capital gains tax (CGT).
Chancellor Alistair Darling announced plans in his pre-Budget report to scrap taper relief system for a new flat rate of 18%. It is understood there may also be proposals to introduce a form of retirement relief for £100,000, although the exact details are not yet known.
Small businesses and entrepreneurs have benefited from taper relief, and resulting low rate of tax, if they have held the investment for more than two years.
Mitchell Charlesworth tax partner, Tim Adcock, believes there could be a temptation for small firms being put up for sale before April as owners try to beat the deadline.
He said: “The proposed changes were a knee-jerk reaction. They are like using a sledge hammer to crack a nut.”
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