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UK Business Owners Accelerate Exit Plans Due to Capital Gains Tax Concerns

3 hours ago
3 hours ago


UK Business Owners Fast-Track Exit Plans Amid Capital Gains Tax Fears

Accelerated Business Exits

  • 29% of UK business owners fast-tracked their exit plans in the past year
  • Increase from 23% 18 months earlier
  • 23% cited fears of an increase in capital gains tax (CGT)

    Capital Gains Tax Overview

  • Tax on profits from selling assets like business assets
  • Typically ranges from 10% to 20% on the sale of a business

    Potential CGT Increase

  • Chancellor Rachel Reeves may announce a CGT increase in the autumn budget
  • Speculations suggest CGT could rise as high as 39%

    Other Reasons for Accelerated Exits

  • 20% accelerated exit plans due to concerns about inheritance tax (IHT) reliefs
  • IHT is a tax on the estate of someone who has died, standard rate of 40%
  • Reeves could raise IHT rate from 40% and make changes to business relief

    Personal Finance Challenges

  • 25% accelerated exit plans due to personal finance challenges
  • 24% cited increased costs of accessing capital due to rising interest rates

    Expert Analysis

  • Laura Hayward, tax partner at Evelyn Partners, sees a trend of owner-managed businesses wanting to exit quickly
  • Family succession is the most popular exit strategy
  • Urgency to get tax affairs in order ahead of potential changes in the budget

    Impact on Savers

  • Bestinvest notes an increase in savers looking to shield investments from tax raid
  • Bed and ISA method allows investors to sell and repurchase investments in a tax-efficient way
  • Instructions for Bed & ISA transactions have risen by 25% since Labour’s election victory

    In conclusion, the research highlights the growing concerns among UK business owners regarding potential tax changes, especially in capital gains tax and inheritance tax. The fear of increased tax rates and changes to reliefs has led to a significant number of owners accelerating their exit plans. This trend reflects a broader unease in the business community about the upcoming budget and the impact it may have on their financial future. It is essential for business owners to stay informed and proactive in managing their tax affairs to navigate potential changes effectively.

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