The Chancellor has recently asked the Office for Tax Simplification to review the Capital Gains Tax regime and aspects of the taxation of chargeable gains in relation to individuals and smaller businesses.
The scope of the review will include a number of factors around Capital Gains Tax including: –
- The scope of the tax and the various rates that can apply
- Reliefs, exemptions and allowances
- The annual exempt amount
- The situation relating to individuals, Partnerships and estates in administration
- The situation regarding unincorporated businesses and sole traders/investment companies
- Interactions with other parts of the tax system
Initially there is a call for evidence by the 10th August and there will then be a consultation on technical details with a deadline of the 12th October.
This review could potentially generate a lot of speculation around future Capital Gains Tax arrangements and will no doubt result in some changes to businesses that are already in the pipeline being brought forward at a greater speed. Some commentators suggest that the Office of Tax Simplification is only interested in simplifying taxes, although there is nothing to suggest that simplification does not necessarily result in an increase in the rate of tax.
This is the start of a relatively long process and it could be up to 12 months before any conclusions are published.
Those businesses who are looking at potential sales or other changes to their businesses or property assets that could trigger Capital Gains Tax liabilities may consider this as an opportune moment to push these matters forward at a greater speed, so that these changes can be dealt with in a known and understood tax regime, rather than one which may have potentially significant changes in the future.
If you are looking at potential changes to your business and wish to discuss how Capital Gains Tax may impact on this, in particular with regard to valuations etc., then do get in touch with one of the team.