Our website uses cookies to store information on your computer. You may delete and block all cookies from this site, but parts of the site will not work as a result. Find out more about how we use cookies.
(Accept cookies and do not show this message again)
Shout99 - News matters for freelancers
Search Shout99 - News matters for freelancers
(Advanced Search)
   Join Shout99  About Shout99   Sitemap   Contact Shout99 18th Jun 2024
Forgot your password?
Shout99 - Freelancers, FO35, Section 660
New Users Click Here
Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660
Front Page
Freelancers' Shop...
Ask an Expert...
Direct Contracts
Press Links
Question Time
The Clubhouse
Conference Hall...
News from Partners


Business Links

Shout99 - Freelancers, FO35, Section 660

Freelancers' Shop

Personal Financial Services
from ContractorFinancials




Income protection

... and more special offers for Shout99 readers in the Freelancers' Shop

Shout99 - Freelancers, FO35, Section 660
Shout99 - Freelancers, FO35, Section 660

News for the
Construction Industry

Hardhatter.com - News for small businesses in the construction industry

Powered by
Powered by Novacaster
Shout99 has a number of special offers for its readers to help you run your small business (click on red links for more information):
PI insurance
From £98 for freelancers and management consultants
Income protection/PHI
Tailored income protection/PHI insurance for freelancers
Online pension finder for freelancers
Specialist banking service for small businesses and freelancers

Company sellers face 'Catch 22' situation
by Susie Hughes at 10:22 05/08/08 (Press)
A legal loophole used by hundreds of entrepreneurs to avoid paying a higher capital gains tax rate this year is set to be hit by the economic downturn.
According to a report in the Financial Times,when the Government said that it would increase the base rate of capital gains tax for many people from 10 per cent to 18 per cent in April, it triggered a frenzy of company sales as owners tried to avoid paying the higher rate.

For those who were unable to sell their companies before the April 5 deadline, accountants came up with a loophole that allowed them to crystallise the old 10 per cent rate before a sale was completed.

The move involved entrepreneurs signing unconditional sale agreements with another party, in many cases a trust, which would complete only once a third-party buyer was found. This ensured that the owner of the company would pay only 10 per cent on the gains even if selling after April 5.

But the economic downturn has made it much harder for companies to find buyers at an acceptable price, increasing the chances that many will be left facing a "Catch 22", say accountants.

The FT reports that those businesses that fail to sell will still have to pay a tax bill, due on January 31 next year, for 10 per cent of their capital gains but without the proceeds from a sale to pay it.

In some cases, company owners may be tempted to tear up their initial sale agreement to avoid the tax bill. However, accountants say that this may not work and that they will in any case lose the stamp duty and fees that have already been paid on the sale.

Full article: Company sellers face 'Catch 22' bill as downturn hits tax loophole - Financial Times

If you wish to comment on this article, please log in and use the Reply button below. Registering is free and easy - see 'Join Shout99'.

View Comments (Flat Mode) Printer Version

Mail this to a friend
Company sellers face 'Catch 22... Susie Hughes - 5/08
    Better link mikew - 8/08

Copyright 1999-2018, Shout99.com | All Rights Reserved
Privacy Notice and Terms of Use