“Take action now” is the advice experts at independent advisory firm Quantuma are offering to advisers acting for directors who are considering liquidating their business, if they wish to take advantage of the “likely to be axed” Entrepreneurs' Relief.
Following the Conservative victory at the General Election in December, they have confirmed that the delivery of the Budget speech is set for the 11th March. It is widely anticipated that an announcement about the future of Entrepreneurs' Relief will be made, having been trailed in the Conservative Party election manifesto, which, in respect of taxation, stated “…some measures haven’t fully delivered on their objectives. So we will review and reform Entrepreneurs’ Relief”.
The Prime Minister has already suggested that a tax break for entrepreneurs is likely to be axed in the Budget, saying the Treasury is against Entrepreneurs' Relief which allows business people to pay a 10% rate of capital gains tax when they sell qualifying assets.
Entrepreneurs' Relief impacts business owners contemplating any form of capital realisation event, whether that be business disposal, a shareholder restructuring, realisation of capital value if the business has excess assets, or exiting a retiring family member from a business.
Our corporate finance team has executed many transactions in very short timeframes, and also is advising clients on Employee Ownership Trusts which offer favourable Capital Gains Tax treatment where that structure might fit business objectives.
In addition, our solvent liquidation specialists routinely undertake many hundreds of Members' Voluntary Liquidations every year, with a significant number of these assignments taking place in the run up to the budget, and more so in the last couple of years where Entrepreneurs' Relief has been mooted as being “at risk”.
To discuss your client’s options get in touch at your earliest opportunity.