Welcome to Del Monte
Read more
October 19, 2024 | 4 min read
Author: Andy Wood
Interview with a vampire
I’ve just done an interview with a journalist. Back in the day, I used to do a few of these but not so many these days.
This one was about the speculated capital gains rises and whether this is prompting entrepreneurs, particularly younger ones, to see out overseas pastures.
We’ve seen tax advisers, poised like an army of Nosferatus, and encouraged by journalists and the effects of kite-flying policy makers, ready to sink his or her fangs into the next rumour coming out of, well, wherever these rumours come from.
And, let’s face it, there’s been plenty that is fang-worthy since the election and what seems like
[Indeed, the last 24 hours seem to be suggesting that IHT is the next area for a nibble. Which would be perfect for some vampiric Dad jokes. But maybe next time.]
Anyway, back to CGT and emigration. That was the topic.
I live in the UAE – so you might expect me to be not so much on the band wagon, but having constructed it with my own hands, varnished it, and selling tickets for a quick ride around the Palm on it on Eventbrite.
But I’m not.
Why on earth would it be my business to encourage people to leave the UK? Why would I encourage them to move to the UAE? Certainly, not until I start getting paid commission .
If you wanna leave the UK then that’s your choice. I’ll happily advise.
If you wanna come to the UAE, fine I’ll advise.
Same for other places.
But, as the journalist posed, what of founders and CGT? Might an increased rate of CGT lead to them setting up overseas?
Well, I’ve always whispered it with my hand over my mouth, that tax isn’t the most important thing in the world.
Has this vampire become a vegan?
Well, bear with me.
No one REALLY starts a business thinking about whether they will pay 10%, 20%, 24% (that’s what I think we’ll get – I’ve showed my working previously on this) or 30% on a sale… 10,15, 30 years in the future.
Tell me otherwise… and I’ll show you someone who is NEVER going to set up a business and this is just another excuse why they won’t.
However, although tax isn’t the most important thing in the world…sometimes it might be pretty important.
OK, sounds like the vampire has given up on the vegan diet and is a pescetarian… or maybe eats chicken… but not red meat.
Tax might become much more relevant when it comes to the time the person is exiting. So, at the other end of the timeline I was being asked about.
At the moment, you get a 10% rate on the first £1m of gains under BADR. At the moment.
So, if you are selling your business within this limit, most entrepreneurs will tell you that 10% is the right amount of tax, a fair share, their broad shoulders are broad enough to cope with the load.
But what if your gain is £25m or £250m?
Then the tax becomes an awfully big number.
So, it is perhaps this cohort who will look at:
[Note, I’ve set out my position on exit taxes previously).
But, again, tax isn’t the most important thing in the world (tofu vampire returns)
The effect of the temporary non-residence rule means you’ll need to be away for over 5 years. 5 years is a long time (no sh@t Sherlock).
But again, tax isn’t the most important thing in the world…sometimes it might be pretty important.
If its £250m gain. That 5 years might go more quickly.
Sadly, from reading the news today, there’s more and more speculation.
I would very much recommend stocking up on garlic and wooden stakes. Its gonna be a long week and a half!
Lorem ipsum dolor sit amet, consetetur sadipscing elitr, sed diam nonumy eirmod tempor invidunt ut labore et dolore m Lorem ipsum dolor sit amet, consetetur.
Read more