A lot can happen in 12 months. That’s the average time it takes to sell a business.
In recent years, qualifying business owners in the UK have been able to take advantage of an unusually generous tax break under Entrepreneurs’ Relief, where Capital Gains is effectively set at 10%.
Compare the possibility of turning your shares and assets into cash at 10% tax with working for the next few years, paying tax at the higher rates.
Then think about what could happen before you finally make the leap and decide to exit your business. Will this rate of 10% still be available, or will the Chancellor see it as a soft target to raise more tax and appease those who see wealth-creators as the devil incarnate?
Surely, if the Conservatives are still in power, this couldn’t happen, could it?
Really? When I sold my first business in 1988, the rate of Capital Gains was 40%, and that was under a Tory government. I paid the taxman enough to buy a very nice house, thank you very much.
I’m a business broker, not a tax advisor and I’m not suggesting everyone should offload their businesses right now; just that it might be prudent, if you have been considering it, to act sooner rather than later and discuss the pros and cons with your accountant and IFA.
Or, if you are planning to exit later, rather than sooner; put together a strategic plan to ensure your business is as attractive as possible to as may buyers as possible.