IFB urges the Treasury not to raise CGT on business assets
Any increase in capital gains tax (CGT) for ‘business assets’ could have a damaging effect on family-owned firms and their ability to grow and be successful, the Institute for Family Business (IFB) told the Government today.
In a letter to Mark Hoban MP, Financial Secretary to the Treasury, the IFB has called for the CGT rate for business assets to be held at the current rate of 18%.
Grant Gordon, IFB director general, said: “If we are to encourage wealth and job creation we must maintain strong incentives for family business entrepreneurs to invest, so it’s crucial that the Government doesn’t raise the tax rate on business assets.”
Due to their ownership structure reliefs from CGT for business assets are crucial for investment in family businesses. Families often invest funds collectively in their business, with one or more family members having an active role in management.
Often the equity investment of family shareholders who are not involved in management roles is vital to the success and growth of the business. The IFB believes that if there is a particularly onerous definition of ‘business assets’ then investment into certain types of family business could become significantly less attractive.
To read the letter click here
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Notes to editors
1. The Institute for Family Business is an independent, not-for-profit, politically neutral, membership association which supports the UK family-owned business sector through Forums, Representation and Research.Family firms account for 65% of private sector enterprises in the UK economy - 3 million businesses; 40% of private sector employment, providing jobs to 9.5 million people – one job in three throughout the UK; £73bn per annum in UK tax receipts.
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