Business owners 'eager to sell' before CGT increases

Date: 18th March 2008

Business owners have caused a backlog at HMRC by rushing to sell their companies before capital gains tax(CGT) increases next month.

The Times reports that business owners have overwhelmed HMRC resources by applying for sales approval before April 5th - after which a single 18 per cent rate of CGT will be introduced on gains over £1 million.

A ten per cent entrepreneurs' relief rate will be applicable to the first £1 million of lifetime gains.

"There is a mad rush of people selling up now to avoid paying the extra tax after April 5th. But there are huge delays in the processing of clearance applications at the Revenue," accountant Mark Warburton commented.

A HMRC spokesperson told the Times that although it was busy, approval applications were still being turned around within 30 days.

Tax simplification measures were also outlined in last week's Budget, including plans to simplify the rules governing corporation tax calculations for small businesses.