The new founders relief reminds me of signs that used to be shown in shops when I was a kid. 10% CGT rate on up to £10m sounds amazing!
Yes some founders will land within the very narrow definitions but the real story of founders is in the everyday.
The Founder that buys a van full of tools and ends up with half a dozen vans thirty years later after many many years of slog.
Or the Founder that makes a fantastic butty and starts catering events and thirty years later has three shops selling thousands of butties.
These are the every day founders that risk everything yet neither are likely to meet the criteria for the new relief. The whole time they run their business their income and house is on the line. One misstep can cost them everything.
The government can and will be trumpeting how they are supporting entrepreneurs but they have forgotten 99.9% of the everyday heroes that keep the country going.
(HMRC say 600 people a year will benefit from founders relief – considering there are millions of founders out there that is where I get 99.9% forgotten)
Those very forgotten founders also saw a reduction in business asset disposal relief. They now pay 18% on the first £500k then full CGT on the balance. This is up to a £30,000 increase in tax on “Founders” that risked everything.
For context someone that buys a share in plc – takes no risk other than than the money used – also pays 18% if a basic rate taxpayer and 24% if a higher rate taxpayer.