We suggested before the General Election that clients might consider taking action in advance of 12 December to forestall possible tax changes under a Labour Party government, especially in regard to Capital Gains Tax (“CGT”).
Labour’s electoral collapse means that widescale tax increases are off the agenda for the next few years. However, although the Conservative manifesto expressly committed that “we will not raise the rate of Income Tax, VAT or National Insurance” it conspicuously made no mention of CGT.
Rumours abound of changes to (or even abolition of) Entrepreneurs’ Relief and its 10% rate of CGT, perhaps as early as the Budget will be on Wednesday 11 March. Such rumours are the more credible because the withdrawal or restriction of this tax break would seem to be wholly consistent with Mr Johnson’s aspirations to one-nation Toryism and with re-aligning the government with the perceived values of voters in Labour’s former heartlands.
Crystallising a CGT event within the next two months may therefore be well worth considering, in order to capture charges to tax at today’s rates. We at BKL have some simple ideas and some more sophisticated ones. What is appropriate and practical will depend on the assets concerned, the timeframe, and other factors; but if you would like to explore what might be possible, please speak to your usual contact at BKL or use our enquiry form.