Just a thought...

I recently received an interesting email from Andrew Watters director at Thomas Eggar. It suggested that many entrepreneurs are expected to liquidate their companies before the end of the tax year. They fear that “an imminent tightening of the tax rules will more than triple their bills”. Andrew explains: ‘Different ways of taking money out of companies can have different tax consequences. If it is deemed to be “income” it is a substantially higher tax rate than if it is deemed to be “capital”. Some people have thus been arranging their affairs to ensure the money they receive is a capital distribution and so taxable at the lower rate. The government is changing the legislation again to try to prevent this sort of behaviour. This will lead to further complexity and will generate further tax planning on how to minimise tax rates within the law.

‘We are of course now...