Capital Gains Tax
Pre-sale planning can reduce or eliminate the potential tax liability on the sale of an asset or business altogether. We have helped individuals with CGT mitigation strategies including short term emigration planning using various European countries, and other alternatives where such planning is not considered suitable or practical.
The best strategy is to structure matters prior to a sale, preferably before a sale is even considered, but there are still possibilities for reducing the capital gains tax liability on a gain already made in the same or previous tax year.
CGT planning often revolves around pre sale tax planning on the disposal of private companies. There are a number of planning techniques used to reduce capital gains tax from the top rate of 40%, ranging from relatively simple non-aggressive ideas to complex assertive strategies carrying with them high levels of potential savings.
Increasingly CGT planning is centred around ensuring the availability of CGT business asset taper relief, which potentially reduces the rate of CGT from 40% to 10%. The workings of taper relief is a particularly complex area of capital gains tax. The legislation has changed many times and this has created anomalies, such as:
- Why does it take until April 2010 to get full taper relief on some shares owned before 6 April 2000, when it only takes 2 years for similar shares acquired after that date?
- Why can your taper relief get worse when you retire?
We advise clients on the relevant taper relief legislation for them and how their position can be improved.
Other aspects of CGT planning include techniques to reduce tax payable on the redemption of loan notes and planning for individuals with significant holdings of a single quoted stock.
