9% CGT up to £750k?

[IR35 Avoider]

I kind of agree with both Andy2 and Tim123 on this.

Firstly, in my ideal world of a flat tax with corporation tax at the same rate as income tax, there's no room logically for any CGT at all on shares, because all profits within companies will already have been taxed at the income tax rate. Since all distributions (dividends) are either a return of capital or profits after corporation tax, it follows that shareholders will, on average, not receive any money that has not been taxed at the standard rate. There should therefore not be any personal tax (income tax or CGT) on their dividends or capital gains. (Note the phrase "on average". One shareholder may well make a untaxed gain by clever timing, but for every gainer there must be a loser who can't use the loss to get a tax reduction, so it all balances out, from the governments point of view.)

At the same time I agree with Tim123, that if someone is selling a business for a large amount then the overall tax (Corporation tax + CGT) is roughly equivalent to higher rate tax anyway, which is probably the amount they ought to pay, under the current tax system. The only concession I might give them is the ability to put the sale amount into a pension, so they can spread the taxing of it over a number of years. I suspect that might be possible already, with the help of a creative accountant.

If the seller is a contractor who's a basic rate taxpayer, then it was always better to take the money out as dividends over a number of years, that way avoiding CGT altogether.

[hugebrain]

Forced into Buy-To-Let?

I guess this means we all have to get buy-to-let properties now. At least until we have used up our £750,000 allowance. Less than 9% tax is too good to pass up. Makes me feel a bit silly for working in the first place.

[MrRobin]

The announcement is 10% CGT for up to £1M. 18% on the rest.

Mode discussion in the Accounting/Tax forum

[DimPrawn]

The announcement is 10% CGT for up to £1M. 18% on the rest.

Mode discussion in the Accounting/Tax forum

£1M per year, per sale or lifetime?

[MrRobin]

£1M per year, per sale or lifetime?

Lifetime

[AtW]

How the **** is having to pay 18 grand tax on 100 K of profit "potentially ruinous", it's a ludicrous suggestion, you've still got 82 grand left.

It's double the tax to pay. So if you had plans for the money then suddenly you have to change them. It is bullcarp that Govt can change legislation RETROSPECTIVELY - new rules should have never affected those who have ALREADY INVESTED, whatever the rules are they should only apply to NEW investments starting from some point in the future. The whole Govt deserves to be made walk the plank for tax changes like this - big VCs are not affected anyway as they would use complex offshore mechanisms, so only small businesses are screwed. If this is how British Govt behaved a few centuries ago then I am not suprised Americans revolted - heck, the only suprising thing that the British did not revolt.

[AtW]

Shout 99 suggest the 750k is a lifetime limit.

Rubbish lifetime limit - souinds like they don't want small folk to get rich, what the heck can you buy on £750k these days? A decent house, and not even in London area - I will be damned if I ever vote Labour

[Moscow Mule]

Rubbish lifetime limit - souinds like they don't want small folk to get rich, what the heck can you buy on £750k these days? A decent house, and not even in London area - I will be damned if I ever vote Labour

You're lucky you get a vote at all...

[DodgyAgent]

No?

Perhaps if you do the "close down the company and extract the money that's in it" trick, but the complainers aren't in that camp.

They're people who have run (what HMG considers) 'real' businesses that now have a 'goodwill' value, and when the owner retires he sells it off for let's say 2 million, all of which is Capital Gain. So they are complaining about only being able to keep 1.6 million instead if 1.8 million.

OK, 200 grand is a lot of money, but when you just gained a mil an half, can you really tell the difference?

And don't forget, there are an awful lot of winners here. There are lots of BTLers (and small shareholdres) who will now have to pay 18% CGT when previously they would have paid, 40 or 38 or 36%. Are these people shouting about how unfair the change is?

ISTM stupid for AD to give the losers back what they have lost, and allow the winners to keep their winnings. He should have just done nothing.

tim

Your ignorance and assumptions are awesome. How many small business owners sell up for £2million? very few. Most will be lucky to get £200,000. They are not all technology businesses that go for millions. Most of them are small shops and other unfashionable businesses. Remember these people do not have pensions either.

In true commie style you blithly dismiss 18% as "nothing to them", just as every other socialist loser pretends to arrogantly know what is best for "other people's" money.

The sooner people question what is done with our tax instead of looking at taxation as some sort of punishment for being "better off (apparently) than me" the better everyone's life will be.

[DimPrawn]

Your ignorance and assumptions are awesome. How many small business owners sell up for £2million? very few. Most will be lucky to get £200,000. They are not all technology businesses that go for millions. Most of them are small shops and other unfashionable businesses. Remember these people do not have pensions either.

In true commie style you blithly dismiss 18% as "nothing to them", just as every other socialist loser pretends to arrogantly know what is best for "other people's" money.

The sooner people question what is done with our tax instead of looking at taxation as some sort of punishment for being "better off (apparently) than me" the better everyone's life will be.

Hear Hear you Capitalist pig.