Recent election spending promises from all sides have prompted some discussion here at Polestar as to how these are all to be funded. Aside from borrowing, Entrepreneurs’ Relief and Capital Gains Tax stood out as a target for potential tax rises.
Now Sir Edward Troup, former Head of HMRC, appears to agree, which may be somewhat more concerning for business owners than the mullings of a corporate finance team that could be seen to be potential short-term beneficiaries of such a policy change!
Polestar is already working with a number of owners who have pre-empted things and are looking to accelerate exits. Options include partial-exit structures by which owners can spread the risk by taking some funds off the table whilst retaining a stake in their business going forward.
We have a number of debt backed solutions and structures which are proving successful in this area, and significant funding is definitely available for the right businesses.
Is the timing right, now? Who knows? The ongoing BREXIT saga is making decisions anything but straightforward to call – but the cost of extracting funds from your business is unlikely to get cheaper than 10%, in our view.
As always, an initial chat might generate a new perspective and freshen your thinking, whether exit related, tapping into the significant resources currently available to fund expansion or even to consider strengthening your business through building additional contact and referral networks.
Happy to talk!
Sir Edward Troup, who was executive chair of HMRC from 2016 until January 2018, said whichever party won the general election on 12 December should abolish the “entrepreneurs’ relief” applied to capital gains tax (CGT).