UK founders rush to sell startups ahead of Autumn Budget
As the UK approaches its Autumn Budget, startup founders are selling businesses due to potential capital gains tax increases, with some considering relocation abroad amid rising tax concerns and government scrutiny.
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As the UK approaches its Autumn Budget on October 30, 2024, many startup founders are hastily seeking to sell their businesses due to concerns over potential increases in capital gains tax. With Finance Minister Rachel Reeves indicating that income tax, national insurance, and VAT will not rise, attention has shifted to capital gains and inheritance taxes, which could affect the Business Asset Disposal Relief. This relief currently allows founders to pay a reduced tax rate on exit proceeds, but any changes could significantly impact their financial outcomes. Some founders are accelerating their sale processes, fearing unfavorable tax news, while others are contemplating relocating their businesses abroad if tax burdens increase. The demand for tax advice regarding relocation has surged, with popular destinations including the UAE, Cyprus, and Malta. The UK government has faced criticism from the tech sector over tax credit issues and potential immigration restrictions, which could hinder growth. However, the extension of the Enterprise Investment Scheme (EIS) for another decade has been viewed positively. The upcoming budget will be a critical test for the government's commitment to fostering a supportive environment for entrepreneurs and investors.
- UK founders are rushing to sell startups before the Autumn Budget due to tax concerns.
- Potential increases in capital gains tax could affect the value of business exits.
- Some founders are considering relocating abroad if tax burdens rise significantly.
- Demand for tax relocation advice has increased, with the UAE being a popular choice.
- The government faces scrutiny over its support for the tech sector amid mixed recent developments.
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5 commentsI’d guess the pensions makes sense - you can take money out of an effective 62% tax rate, but you’ll never be paying that sort of tax rate when you withdraw from your pension, so that tax just wouldn’t get paid
IHT has so many exemptions too. The tories would have done better just having a simple system and increasing the threshold. Right now, you can pass a pension down and it’s exempt from IHT, and you already skipped a bunch of tax on it already
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