With one day to go until the 2019 general election voting day, latest election polls show a Conservative led government to be the most likely outcome. However, as we all know, polls have been wrong before and clients who are currently holding assets with substantial gains may be weary of Labour’s plans to tax capital gains (CGT) at income tax rates (up to 50 per cent) in place of the current rate of CGT, which may be from 10 per cent to 28 per cent, depending on the type of asset, the holding period and when it is sold.
Adding to the many tax surprises in the leading parties’ manifestos ahead of the general election, is the possibility of doing away with Entrepreneurs’ Relief, which reduces the amount of CGT payable on the disposal of business assets. This is unsettling for business owners who are in the process of, or perhaps contemplating selling their business.
It is to be hoped that, if these changes do go ahead, there will be a suitable period of time for planning. However, with all the current unpredictability, one may choose to anticipate these changes by taking advance action and entering into appropriate transactions ahead of the general election so as to crystallise charges to tax at today’s rates.
For more information, please contact your usual Beavis Morgan Partner.