What are the benefits of selling now?
Entrepreneurs' relief, which applies to business owners seeking to sell their business, continues to grant eligible owners a preferential capital gains tax rate of just 10% on business gains of up to £10 million; however, this has only been guaranteed for the next 12 months. Additionally, the rate of capital gains tax has been reduced by 8% on anything gained after £10 million.
Previously, individuals would have also been required to be employed within the firm and hold a stake of 5% or greater in order to claim a £10 million lifetime allowance at the reduced rate. However, under the new changes which are being referred to as "investors relief", the provision has been extended to all long-term investors with shares in privately owned companies.
The announcement is good news for both buyers and sellers as it could potentially pave the way for a new type of mainstream investment, with investors now provided with a greater incentive to invest in SMEs and subsequently benefit from the rewards of a reduced tax liability. Mr Osbourne has suggested that the changes would "put rocket boosters on the backs of enterprise and productive investment".
Act now to take advantage!
Such positive conditions are only guaranteed until the next budget in 2017 so if you are considering a full or partial sale of your company, then I believe that now is a great time to act.
If a sale is something you are currently considering, then our services could be of great benefit to you and I would like to discuss this further. Please contact me on 01332 609318 or you can reply to my email so that I can contact you directly. Of course, all discussions will remain confidential and there is no obligation on your part to use our services.