Be prepared for rise in taxes

Oct 21 2009 by Peter McCusker, The Journal

ONE of Newcastle's leading dealmakers is warning that businesses need to put plans in place now in preparation for a potential hike in capital gains tax (CGT) next year.

Angela Toner, corporate finance partner at the Newcastle office of Baker Tilly, believes recent political discussions about a further rise in CGT could gain momentum in the next few months and catch entrepreneurs off their guard.

Ms Toner said: “Given the current state of public finances, tax rises seem inevitable and an increase in the CGT rate may be one of the first to be implemented by whichever party forms the next Government.

“Though a CGT hike will be deeply unpopular with many business leaders, it is unlikely to be controversial with the electorate as a whole and could appear in a number of election manifestos.

“With a General Election now a certainty within the next nine months, the potential changes to CGT are not too far away. The average company sale takes around six months to complete and we therefore recommend that business owners review their strategic options now.

“There are a number of exit routes that remain open, however business owners that want to realise value for years of effort spent developing their business need to take proactive steps to manage their future before their options become severely limited.”