Brentwood-based accountancy firm M J Bushell is warning business to plan ahead strategically before disposing of a business in order to mitigate their Capital Gains Tax (CGT) liability.
Accountants at the forward-thinking firm are trying to raise awareness of Entrepreneur’s Relief (ER) and other important tax planning measures, such as roll-over relief and hold-over relief, which might be able to save them a lot of money when selling a business.
“It is vitally important that a business sale is structured in a tax-efficient way, or else business owners can easily find themselves faced with surprisingly high CGT bills,” said Dan Sayers, Director at M J Bushell.
“Many of the circumstances which encourage business owners to sell or dispose of a business can be unpredictable – and sometimes even stressful,” he said.
“Due to this, business owners have a tendency to overlook the importance of strategic tax planning until it is too late and will end up missing out on the fantastic reliefs and savings which might otherwise have been available to them.”
Dan said that while “delaying tactics” were a business owner’s worst enemy, failing to seek specialist advice could also prove detrimental, too, due to the complex rules governing ER and other reliefs.
“A number of complex qualifying conditions need to be met and the sale needs to be structured in the correct way, which is why tailored advice is vital every time,” he said.
“This is true even if the seller has previous experience of disposing of businesses – as circumstances will always differ each time,” Dan added.