NewswireToday - /newswire/ -
Ayr, Ayrshire, United Kingdom, 2007/10/16 - Ayrshire Chartered Accountants and Chartered Tax Advisers, Sinclair Scott have criticised the changes to capital gains tax announced by Alistair Darling in his first Pre-Budget Report.
With the introduction of a flat capital gains tax rate of 18% and the removal of indexation, many business owners will face an increase in their capital gains tax rate from 10% to 18%.
Andrew Sinclair, partner in Sinclair Scott has commented: “It is incredible that one of the most business-friendly aspects of the UK tax system has been reversed by the new Chancellor in his first major speech. It is particularly difficult to understand, as business asset taper relief was heralded as a way of encouraging entrepreneurs when it was introduced by the current Prime Minister Gordon Brown.”
As the change is not effective until after 5 April 2008, there is a period prior to this date when action can be taken to qualify for the 10% tax rate.
Sinclair Scott are encouraging all business owners and owners of properties used for trading purposes to consider what action they can take to qualify for the 10% rate. They have produced a number of action points:
• Consider disposing of business interest or property let for trading purposes prior to 5 April 2008.
• Bring forward any relevant disposals which are planned for after 5 April 2008
• Consider incorporating a sole trader or partnership business and/or transferring assets to a limited company prior to 5 April 2008
• Making gifts to children or other family members to generate a capital gains tax disposal prior to 5 April 2008.
Andrew Sinclair explained that it is imperative to review all your assets to identify if any action can be taken within this window of opportunity.
As a footnote, whilst business owners may be hit with increased capital gains tax, many investors (including second property owners) will have a lower capital gains tax rate at 18%.
Whilst there are winners and losers, particular importance will be placed in deciding whether assets should be disposed of prior to or after 5 April 2008
The Elite Ayrshire Business Circle
Sinclair Scott Chartered Accountants are members of the Elite Ayrshire Business Circle.
The Elite Ayrshire Business Circle is a newly formed association of some of the top companies in Ayrshire.
Its purpose is to publicise its members, and to celebrate and promote the rich diversity of industry, commerce and business services available within the county boundaries of Ayrshire.
Members include the Clydesdale Bank, Ayr Racecourse and the Western House Hotel, and member company activities include building and construction, architectural practice, estate agency and land management, chartered accountancy, insurance broking, legal services, golf club management, marketing services and brand creation, web design and public relations consultancy.
The Elite Ayrshire Business Circle runs its own online news magazine
As well as regularly updated illustrated articles about member companies, Ayrshire Business News also features rolling news, business and sports headlines, and its own online department store.
For further information about The Elite Ayrshire Business Circle and to apply for membership, E: eliteayrshire[.]gmail.com
3 Wellington Square
Ayr KA7 1EN
T: 01292 288999 / F: 01292 272150 / M: 07884 315275 - E: ca[.]sinclairscott.com.