WHY THE URGENCY? Autumn Statement (17th November 2022)

With half of the £50 billion hole in the UK's finances, that is £25 billion to be raised from an increase in taxes, it is no surprise to read in the press that in view of the Autumn Statement (Budget) on 17 November 2022, Capital Gains Tax (CGT) rates, allowances and reliefs are once again being reviewed. Research suggests that increasing CGT rates in line with income tax could alone bring in an additional £16 billion of the £25 billion required - see the articles in the Telegraph and Independent - Jeremy Hunt set to launch capital gains tax raid (telegraph.co.uk) Jeremy Hunt 'considering rise in capital gains tax' to fix £50bn black hole | The Independent

Previously, when Rishi Sunak was Chancellor, he ignored the recommendations of The Office of Tax Simplification's (OTS) Report issued in November 2020, which he had commissioned - see link: Capital Gains Tax stage 1 report - Nov 2020 - web copy (publishing.service.gov.uk). Now with £25 billion to be raised, the Government may not have any choice in the matter.

If you were planning to place your company or LLP into MVL in order to claim Business Asset Disposal Relief (BADR/formerly Entrepreneur's Relief) with a view to paying just 10% on the capital distributions received,THEN DO NOT DELAY, since if BADR were to be withdrawn, you would be paying 20% CGT instead of 10%. You may also see the Annual Exempt Amount (the annual CGT free allowance for each UK taxpayer, which is presently £12,300) being reduced or withdrawn entirely.

Evidently, if CGT rates are increased in line with income tax rates, including the higher and additional rates, then most of the tax advantages of using MVLs may cease completely.

Subject to the tax advice you are strongly recommended to obtain urgently, on the basis that you would like to receive a 100% capital distribution on or before 16 November 2022, where possible, i.e., before all clearances would have been received, contact us asap:

CALL: 01727 811161 (9am - 5pm, Mon - Fri) OR EMAIL US: info@sterlingford.co.uk

DISTRIBUITIONS TO BE MADE ON OR BEFORE 16TH NOVEMBER 2022:

LIQUIDATIONS MUST COMMENCE NO LATER THAN 15TH NOVEMBER 2022 - STERLING FORD TO BE CONTACTED NO LATER THAN 11TH NOVEMBER 2022