There has been a great deal of talk over recent weeks regarding the abolition or reform of Entrepreneur’s Relief (ER). Even more so after Boris Johnson’s comments last week. So, it does seem that it’s now a question of ‘when’ and ‘to what extent’ rather than ‘if’ we will see ER restricted or reformed.
Entrepreneur’s Relief comes into play if you are selling all or part of your business. To qualify for relief, both of the following must apply for at least 2 years up to the date you sell your business:
– you’re a sole trader or business partner.
– you’ve owned the business for at least 2 years.
Understandably, those hoping to claim ER on an imminent gain will be rather nervous when considering the timing of any relevant transaction.
Afford Bond’s Tax Director, Chris Regnauld said: “As I see it, there are several options. Firstly, as the budget is on 11th March 2020, there is the possibility that the Chancellor will announce an immediate change from this date. However, it is looking more likely that any changes announced in the budget will take effect from 6th April. That said, it is possible that there will be anti forestalling provisions introduced to catch any transactions, from 11th March, that have been artificially constructed to benefit from entrepreneur’s relief. Finally, it is also possible that the budget will trigger a consultation process to discuss and review any proposed changes. This would trigger a later date – perhaps Summer 2020 or even April 2021. At the time of writing, there is no certainty, and it is important that those concerned should discuss their options with their accountants sooner rather than later.”
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