'Entrepreneurs' Relief'

[Redarress]

Do you Guys think the 'Entrepreneurs' Relief will be altered at the next Budget?
If so in what way ?

Thanks

[Eric Mc]

Why do you think it might?

Have you heard some rumours that it might be abolished. It's only been in two years.

[wattsm666]

There are always rumours that Capital Gains Tax will rise, especially with the disparity between income tax and CGT at highest rates. 50% vs 18% from April, however, will this affect entrepeneurs relief - who knows?

[Redarress]

I am associated with the buying of a company at the moment and my associate wants to rush the deal through before the budget due to the fact that the company sellers may not sell or may demand more dosh if the relief is abolished/altered. They and their advisors do not seem unduly worried about it although this could change if they suddenly realise they have £1mill extra in tax to pay due to changes in the Relief . I however feel this will not happen as the Gov are trying to get us entrepreneurs stimulated . I also feel we are pressuring ourselves to complete the deal which may lead to mistakes/wrong assumptions being made for no purpose (Mr Darling if you happen to be reading this could you just tip us the wink either way then I may get a few more hours sleep at night !!)

Thanks for your input

[Dupont666]

Redarress said:

I am associated with the buying of a company at the moment and my associate wants to rush the deal through before the budget due to the fact that the company sellers may not sell or may demand more dosh if the relief is abolished/altered. They and their advisors do not seem unduly worried about it although this could change if they suddenly realise they have £1mill extra in tax to pay due to changes in the Relief . I however feel this will not happen as the Gov are trying to get us entrepreneurs stimulated . I also feel we are pressuring ourselves to complete the deal which may lead to mistakes/wrong assumptions being made for no purpose (Mr Darling if you happen to be reading this could you just tip us the wink either way then I may get a few more hours sleep at night !!)

Thanks for your input

Thought the relief was only upto 1 million and you pay 10% on that... after that I thought it was business as normal for the robbin bds?

[Eric Mc]

Correct.

The relief is for the first £1 million of LIFETIME business asset gains. Once the £1 million is used up, all futer business asset gains will be taxed at 18%.

[456mgt]

It's total window dressing. I wouldn't be optimising ^any^ business decision on the back of this ridiculous relief. Hence I really dont give a rats ass what they do with it. If this makes a difference to you it's time to raise your sights.

[DanX5]

Quite possibly - we were tipped by a leading tax adviser (at the highest level - author of the leading professional publication on ER) at a meeting about a fortnight ago for anyone who is thinking of selling a qualifying entrepreneurs relief asset to do so ASAP as CGT ripe for an increase ON budget day (possibly 17th or 24th March).

On the basis that many advisers are looking at ways to turn income into a capital gain to pay 18% rather than 50% from April 2010, it is hotly tipped that Mr Darling will look to the CGT rate to plug the gap to a lesser level. My guess would be from 18% to something like 40% for non ER assets (with presumably ER qualifying gains to increasing from an effective 10% to perhaps 25%)......

Several of our clients who are selling an ER asset are now accelerating this process.

[wiffmaster]

We were advised the exact same only yesterday by a tax advisor. They said CGT is very likely to rise and advised we try and sell assets that would be affected ASAP. Chances of selling such assets before the change comes in? Slim.

[srebbe64]

I'm expecting CGT to rise but for Entrepreneurs Relief to remain unchanged. What normally happens is the Government initiate rumours of a big hike and then introduce a small hike and everyone says: "it's not as bad as we feared".

[Eric Mc]

It certainly wasn't raised as a pointer in his Autumn Statement.

[Redarress]

Ok thanks very much for your thoughts