Chancellor 'plots to charge income tax on family firm share scheme'
Chancellor John Healey could target a mechanism often used to pass businesses down to the next generation without incurring crippling costs.
TL;DR
- Labour is considering taxing redeemable shares, used for passing down family businesses, as income instead of capital gains.
- This could increase tax bills for owners, for example, a £1 million firm could face a £450,000 bill instead of £240,000.
- The proposed change could raise hundreds of millions of pounds annually.
- Shadow chancellor Andrew Griffith criticized Labour for 'punishing' business owners.
- KPMG expressed 'significant concerns' about the impact on family businesses.
- This follows Labour's previous downgrading of inheritance tax reliefs for family firms.