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| CURRENT SECTION :: Money News | UK's most visited IT Contractor Site - 250k unique visitors March 2008 |
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A tax concession that will see entrepreneurs charged at just 10% if their lifetime capital gains are under £1m will fall below the Revenue radar, it emerged yesterday. Disclosures seen by a national paper say tax staff won’t keep records of “entrepreneurs’ relief” on CGT, recently unveiled by Alistair Darling, the chancellor. Instead, the Revenue will trust claimants not to abuse the relief rate of 10%, even though it would be replaced by an 18% levy once their capital gains exceed £1m. Confirming the plan to CUK, a spokesperson for HMRC explained: "We will not be holding individual records on the off chance that someone will make a chargeable gain at some time in the future. "It is the responsibility of the individual to ensure that a correct return is made at the appropriate time." The decision not to monitor claims for relief, available to limited company owners whose stake in a business exceeds five per cent, suggests abuse of CGT could be rife. Chartered accountant Grant Thornton told the Mail on Sunday that the Revenue’s decision was “extraordinary.” “What is to stop someone claiming the relief again and again every time they sell a business?” Mike Warburton, a tax partner at the firm, reportedly asked yesterday. “It is bizarre to say they will simply not be holding records at all of how many times someone has claimed this new relief. It just shows how ill thought-out by the Treasury the relief has been. Serial entrepreneurs could claim it many times. It will be wide open to abuse.” At the time of writing, the only explanation from HMRC was that moniroing individual claims “would not be the best use of our resources.” Despite the decision, the chancellor has said that, because he wants “to do as much as possible to encourage entrepreneurship”, the lifetime limit of £1m will be kept under review. Feb 4, 2008 Email this article Printer friendly page Previous Page
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