Team Manager
- “Thanks to Nick’s advice we secured a sizeable tax and VAT rebate which was very helpful towards our barn conversion.”
G.G Sevenoaks - The winner of our April prize draw is The Home of Stone Limited. A box of chocolates are on their way to them.
- “It gives us great confidence knowing we are able to rely on you and your team to solve our tax problems...”.
J Matthews JM Hair Ltd - “I don’t think you could improve your service to us as everyone we deal with is great. Nothing is too much trouble...”.
Christine Grey, Grey’s Health & Safety Solutions Ltd - Having hired Ed Gooderham at Green and Co, we now enjoy more freedom to concentrate on other areas of our business, and have a lot less stress...
Mark Cushing – Twisted Pair Limited - "During the past 21 months, when I have needed help and guidance, Green and Co have assisted me in every way".
Carol Jones, K Jones Electrical Limited - “What a fantastic service these guys give, they not only sort your accounts they give impartial advice to ensure all your affairs are up to date and working effectively.”
All Sorts Training - “Becoming a limited company is a big step but with the support of Sam and Ed this transaction will be made smoothly.”.
Vixtay Web Design - “Being my first visit to an Accountant's office I was a bit nervous about what to expect, I was totally surprised... and my fears dispelled...”.
A potential client - “Nick fully understands our business and we therefore have confidence in his judgement. We feel we receive excellent service”
Bev Baker – B E Baker & Sons Limited - “It’s a really nice team, feel like human beings. Advice is excellent and reassuring. Would recommend to friends”
Giles Davis - “Thank you very much, I will definitely recommend you!”
Charlie Fleming – April House Farming - For every £1,000 charged in fees we saved our clients £2,460 in tax.
(on average over the last 12 months).
GREEN AND CO, LOCALLY BASED CHARTERED CERTIFIED ACCOUNTANTS, WARN THAT POTENTIAL MAJOR TAX INCREASES FOR BUSINESSES HAVE BEEN DISGUISED AS "SIMPLIFICATION"
Nick Park, Partner with Green and Co Chartered Certified Accountants, based in Pontnewydd, examines the real impact of Alistair Darling’s Pre Budget Review proposals for Capital Gains Tax.
On the 9th October the Chancellor made substantial changes to the Capital Gains Tax (CGT) regime in his Pre Budget Statement.
From 5 April 2008 Business Asset Taper Relief (BATR) and Indexation Allowances (IA) will be abolished and CGT will be charged at a flat rate of 18%. If you are selling assets the tax charge will depend on whether the sale is agreed before or after 5 April 2008.
BUSINESS ASSETS
This is particularly important if you own business assets such as farms, commercial property and trading companies. The tax will nearly always be higher if business assets are sold after 5 April 2008.
For example consider the position with farm land sold for £400,000 which had originally cost £100,000 in 1982. If the land is sold before 5 April 2008 the CGT liability will be around £12,000. If it is sold after 5 April 2008 the CGT liability will be about £50,000.
In this case the later sale will result in more than four times as much tax being payable.
Unfortunately this scenario will be normal for most farmers and landowners. With an extensive agricultural client base, located throughout Southern Wales, we have been listening to, and assisting with people’s concerns over this issue.
The position will be similar for the owners of other commercial property but generally less extreme as ownership tends to be less long term. The tax cost can be expected to double for sales after 5 April 2008.
These changes will also be significant for people who operate their business through a trading company and are currently questioning whether a limited company is still the best trading vehicle. In many cases the tax cost of dis-incorporation will be much higher after 5 April 2008.
If you own farmland, commercial property or a trading company it is very important that you urgently consider the action you need to take before 5 April 2008. In most cases you should speak to an accountant or an advisor who understands the CGT regime.
In many situations it will be worth trying to arrange sales before 5 April 2008. If no immediate sale is planned you may need to consider ways of crystallising the current reliefs by triggering a disposal before 5 April 2008. There are many ways of achieving this depending on your individual and business circumstances.
NON BUSINESS ASSETS
Assets such as shares and rented residential property are generally non business assets. As a general rule the tax liability will be similar or lower for non business assets sold after 5 April 2008.
If you own non business assets which have increased significantly in value (say more than £100,000) you should consider whether you need to do any tax planning before 5 April 2008. Again, it is important that you speak to an adviser.
To summarise, if the budget is implemented in the Finance Act as it currently stands, it will mean that, the sale of business assets after 5 April 2008 will usually result in significantly higher tax bills. However tax bills will often be lower for the sale of non business assets.
People who own farms, commercial property and trading companies must review their position as soon as possible and if necessary take professional advice.
For more information please contact Nick Park, Green and Co, 01633 871122, e-mail nick@greenandco.com.
Green and Co are a three partner practice based in Pontnewydd, providing specialised services to the agricultural and landowning sectors. Their comprehensive general business services range from a new business advisory service, acquisitions and disposals, to tax planning, audit and accounting – go to www.greenandco.com
