Following the Covid – 19 lockdown the Chancellor has admitted that the UK is grappling with something that is unprecedented. With the UK having to borrow hundreds of billions the Chancellor will need to find ways of raising revenue.
We know that Rishi Sunak has commissioned a review on capital gains tax. This is an obvious target as capital gains tax is charged at lower rates than income tax.
How could this affect you if you are selling your business?
Most pharmacy owners should qualify for Entrepreneurs’ Relief now known as Business Asset Disposal Relief (BADR). This means that you should only pay 10% tax on the first £1m gain when you sell your business. The limit used to be £10m until the last Budget!
It is possible that the government will introduce further changes to the relief or that they may abolish it completely. To put this in perspective, under current legislation if you made a gain of £1m on the sale of your pharmacy and you qualified for BADR you would only expect to pay tax of £100K (10%). However, if this relief is scrapped your tax bill could soar.
If you are thinking of selling your business and would like to talk in confidence, please contact Anne Hutchings on Direct Dial 01494 422848 or Email, [email protected]