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Capital Gains Tax: Proposed Changes Could Affect Share Sales

Time to move your plans forward?


Posted by Helen Beaumont on 16/12/2020 @ 8:00AM

Last month, the Office for Tax Simplification (OTS) released a report highlighting areas of disparity between Income Tax and Capital Gains Tax, recommending that these were addressed ...

Any Capital Gains Tax transactions you may have are better done in this financial year!

Any Capital Gains Tax transactions you may have are better done in this financial year!

copyright: singkham / 123rf

One area that they took particular interest in was accumulated profits in companies on sale or in liquidation. They said there were major disparities here, and recommended HMRC looked at this as soon as possible.

Other recommendations the OTS made included abolishing Business Asset Disposal Relief, although they did say it should be replaced with something akin to the older retirement relief. This means that any tax liability realised on share sales and liquidations of Limited companies after the 5th April 2021 will be far higher than if carried out now.

Tax is currently as little as 10% where Business Asset Disposal Relief applies, but if the OTS recommendations are accepted, this could jump significantly to 45%, which is a huge increase!

Shareholders considering exiting a Limited company via sale or liquidation should be thinking of moving their plans forward to before the 5th April 2021, so they can benefit from the lower levels of taxation in this financial year.

Speak to your tax advisor if you're unsure of your tax position.

Until next time ...



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About Helen Beaumont ...


Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.

Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.

When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.