BUSINESS owners, directors and investors have ‘inundated’ a south coast legal firm with instructions amid fears over potential changes to capital gains tax in the forthcoming budget.
Team members Ellis Jones Solicitors have said their workload has “rocketed” in recent weeks as desperate clients look to avoid paying higher rates of tax or miss out on currently available reliefs.
Capital gains tax is charged on financial gains from the sale, disposal or transfer of assets such as company shares, second homes and certain other possessions.
For directors looking to exit through a business sale, the present rules mean that, subject to specific criteria being achieved around timescales and levels of ownership, the first £1 million of gains attract a 10 per cent rate.
Amounts above that are taxed at between 18 per cent and 24 per cent depending on which personal tax band applies to the seller.
There has been much speculation that the chancellor Rachel Reeves may increase headline rates of capital gains tax in the budget on October 30.
Neil Cook, head of business services at Ellis Jones, said: “We have been inundated with business owners desperate to see deals completed before any budget changes kick in.
“There is a fear that plans for retirement could be wrecked because people are suddenly placed in a catastrophic tax position.
“We’ve seen before that budget changes can be made effective immediately, without any grace period, so people are genuinely worried.”
Fellow Ellis Jones partner Wayne Spolander said the amount of capital gains tax-related instructions at the firm began to pick up after the general election but has intensified dramatically in the past few weeks as the countdown to the Budget has gathered pace.
He said: “We’ve had instructions right across the spectrum of owner-managed business with people looking to sell everything from garden centres to heating engineering firms to amusement parks.
“For those who have been thinking of disposing of their businesses, the prospect of potential tax changes in the Budget is acting as a definite catalyst.
“While we are experts in the law, we strongly recommend those in this situation speak with a tax expert or accountant for the best tax advice around capital gains tax.”
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