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Business owners bail out in time to beat tax hike
EDINBURGH law firm Lindsay's said it had seen a huge increase in the number of business owners looking to offload their companies ahead of hikes in capital gains tax next month.
From April 6, Chancellor Alistair Darling is scrapping taper relief on assets held for at least two years – which currently offer a minimum ten per cent tax rate – with a flat rate 18 per cent tax rate. That means owners selling after the deadline could see tax bills rise by 80 per cent.
Key business bodies such as the CBI warned Mr Darling before his March 12 Budget that such tax changes could damage future investment in enterprise.
William McIntosh, corporate partner at the firm, said merger and acquisition activity in the SME sector, in particular, was running massively ahead of the norm. He said: "Since the Chancellor's announcement we have had many clients coming to us looking to complete company or business sales and management buy outs before the new regime takes effect.
"We are running something like 500 per cent more than the same time last year. Whilst many may already have been considering a sale, the tax change seems to have focused minds on an early exit."
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Weather for Edinburgh
Thursday 24 May 2012
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