Gordon W Buist (EQ Accountants) explains how the publication of Spotlight 63 on landlord tax planning schemes has exposed a fundamental flaw with incorporation relief from CGT.
For many years the incorporation of a sole trade or partnership was structured as a sale of the trading business to a company usually attracting a 10% rate of CGT by claiming Entrepreneurs’ Relief (ER) on the gain. However since 3 December 2014 the sale of goodwill to a ‘related party’ has no longer been eligible for ER (see TCGA 1992 s 169LA(4)).
Further the subsequent restriction on income tax relief for the finance costs of a buy-to-let property business introduced by FA 2015 increased the tax liability...
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Gordon W Buist (EQ Accountants) explains how the publication of Spotlight 63 on landlord tax planning schemes has exposed a fundamental flaw with incorporation relief from CGT.
For many years the incorporation of a sole trade or partnership was structured as a sale of the trading business to a company usually attracting a 10% rate of CGT by claiming Entrepreneurs’ Relief (ER) on the gain. However since 3 December 2014 the sale of goodwill to a ‘related party’ has no longer been eligible for ER (see TCGA 1992 s 169LA(4)).
Further the subsequent restriction on income tax relief for the finance costs of a buy-to-let property business introduced by FA 2015 increased the tax liability...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
