Brendan Burgess
Founder
- Messages
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What happens if the business sells some assets in the meantime?
Machinery or vehicles for example?
What usually happens in many family businesses is that they eventually close down and the owners rent out the vacated property to a third party. It wouldn't be good if the CAT system were to encourage business people to do this unnecessarily.
What happens a deferred CAT liability if a business closes down and the owners form a new company and start a similar but slightly different business?
How would that work Brendan? Every failed company has assets of some sort, but a failure means normally that the money has literally run out. Who would pay the CAT in such a scenario, and how?If it closes down while still owning assets, then it's subject to CAT.
It seems to me that your concerns could be dealt with quite simply by looking at the amount of time the person has to retain the assets for.
It is very generous that the reliefs as currently formulated allow for a sale after 6 years without any clawback. I think a relatively simple fix would be to pick a longer clawback period with the clawback tapering off over that period. So, say for example there's a full clawback on a disposal within 5 years, and then it tapers off by 20% over each of the following 5 years (or 10% over each of the following ten years), so you have to hold for say 10 or 15 years to get the full benefit of the relief.
A family business will, as the name suggests, have a number of generations working in the business. If a child has been working in it since they left college they would probably be in their late 50s or 60s when their parents die.We could make it 15 then? I just don’t think ad infinitum is fair. Maybe 6 is too short.
A family business will, as the name suggests, have a number of generations working in the business. If a child has been working in it since they left college they would probably be in their late 50s or 60s when their parents die.
After 30 years plus of working there they then inherit it. They then have to keep the business until they are in their 70s before they can sell it. Seems harsh. Even more harsh if it’s a family farm.
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