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Tony Restell
Starting Member
United Kingdom
1 Posts |
 Posted - 23 October 2007 : 09:58:16
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I suspect from the entrepreneurs I know that it is the retrospective nature of this CGT change that has so angered the business community - rather than the ultimate rate of 18% that has resulted (though of course we'd all like this to be lower). To have such a sizeable rise in tax applied to investments that have already been made puts the CGT changes in a similar league to the pensions scandals that have affected so many of the UK population in recent years. People are being robbed of assets they believed they had built up over years of hard toil, pure and simple.
This unexpected change means entrepreneurs can no longer make investments in businesses confident of what CGT rate might apply at the time they wish to sell - since having done such an about-turn, who can trust the government not to raise the rate further in years to come? Inevitably entrepreneurs will either reassess their investment options or make those investments but then run the businesses to maximise dividend streams rather than the long-term value of the business. Not a change that is in the interests of UK plc.
The smart move would have been - and still could be - to have this CGT rise applied only to investments made after the date of the announcement – and to commit to any future changes in the rate being similarly applied. This would ensure that no-one is retrospectively punished for investments made under the old regime of tax breaks. It would also mean that at any moment an entrepreneur could invest in a business knowing what the CGT rate would be on any disposal (be that 10%, 18% or any other rate). It is the retrospective and U-turn nature of the new CGT regime that has so angered the entrepreneurial community in my opinion. Let's hope the current discussions with the Chancellor can revise the outcome so that this retrospective trait is removed.
Tony Restell
Co-Founder & Director, Top-Consultant.com |
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williamberry
Average Member
12 Posts |
Posted - 23 October 2007 : 10:27:28
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hi tony, that is an excellent point. I agree with it and think it is worth suggesting.
I also agree that the nature of the sudden increase with no warning and limited consultation meant that business people were surprised and angered.
The labour government has tried hard to build up trust with entrepreneurs and the business community, they now seem to be going in the wrong direction.
Regards, William Berry
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tomball2
Junior Member
United Kingdom
9 Posts |
Posted - 23 October 2007 : 22:11:19
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Great point.
You're right - if it was applied to future investments it would be much easier to swallow.
I would still worry that right or wrong, it would drive investors and therefore investment overseas. Although done by investors own benefits, a lack of investment would hurt the UK in general.
www.cognac.co.uk
www.joineo.com |
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olibarrett
New Member
4 Posts |
Posted - 24 October 2007 : 17:28:03
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Tony that's a really interesting one and it was exactly that point which was put to me last week when I discussed this with two employee shareholders in their 50s.
This will affect their retirement plans and their initial reaction was that 'surely it can't apply to shares we already own?'. |
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williamberry
Average Member
12 Posts |
Posted - 07 November 2007 : 15:15:34
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i agree with this point and i know a number of entrepreneurs trying to sell their companies before april for cgt reasons (me included!)
Regards, William Berry
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Howard
Starting Member
United Kingdom
1 Posts |
Posted - 10 November 2007 : 09:58:53
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Hi Tony,
I agree with your point. I feel that those individuals , in which I include myself, who have owned and run health care practices for several decades (often with independent NHS contracts)are having a sizeable chunk of our earmarked pension taken which, in polite phraseology, is causing considerable concern. The other aspect for independent health care practitioners is that the majority of the long-term career individuals have not regarded themselves as "entrepreneurs" but have seen themselves more under the banner of their various professions. |
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The real problem -- it's Retrospective
