At the moment, if you earn £1 million in income, then you will pay income tax at the rate of 45%. If you sell your buy to let portfolio and make a profit of £1 million, then you will pay capital gains tax at 28%. But if you sell your business for £1 million, then you will pay tax at just 10%. The Entrepreneurs’ Relief Scheme was introduced in April 2008 and since then it has saved people who sell their businesses £22 billion in tax. This is a huge amount of money and there is a real risk that the scheme will not last much longer.
Jeremy Corbyn would no doubt end this tax break instantly if he got into power. Tax breaks for multi-millionaires is certainly not Labour Party policy. The Liberal Democrats feel the same way. But even an incoming Conservative Government might think that it would be a good thing to get rid of a tax relief that in 2017-2018 cost the government £2.7 billion in lost revenue. If we crash out of Europe with no deal, they might need this money badly for other things. In addition, they might feel that scrapping a tax relief for wealthy business owners might get them some positive headlines in the tabloid press!
So, if you are thinking of selling a business, you would do well to do so now before the share of the proceeds that you have to give the government doubles.