.png)
.png)
Business disposal relief – here to stay?
It’s pretty obvious that there will be changes to capital gains tax in the Budget – the key question for most readers will be what happens to business asset disposal relief. Will it be modified or could it go completely?
Ever since CGT was introduced there has been a form of relief for business sales. Back in 1965 it was linked to retirement. To obtain the full relief (a whopping £10,000) you had to have owned the business ten years and be over 65 – between 60 and 65 there was a system of taper. I had assumed that it would have been taken for granted that there would be a relief for business sales but I was surprised to find that retirement relief was not in the original bill – it was added in committee stage, prompted it seems by a clause originally tabled by the opposition.
Since then we have always had relief for business disposals, although the structure has evolved from retirement relief through to taper relief, entrepreneurs’ relief and business asset disposal relief. There have been so many twists and turns along the way that it is very difficult to see any coherent policy driving the relief. So perhaps we might get back to the original form of the 1965 legislation and have no business disposal relief at all.
I suspect that the chancellor might not go that far but, whatever happens, the legislation will have to deal with the problems of previous share-for-share exchanges. I don’t envy the task facing the draftsman. This exchange in the 1965 debate amused me:
Dame Irene Ward: My hon. Friend the member for Worthing (Mr Higgins) has spoken of men who run small businesses. Presumably, there are also women who run small businesses. Would they not be included by the amendment?
Mr Higgins: I certainly hope so.
Truly it was a different world.
If you do one thing…
See the updated advisory fuel rates (tinyurl.com/fuelrates).
