Family firms to be hit with mega tax bills as Chancellor prepares cash grab
FAMILY businesses are set to be hit in the Budget as the Chancellor is plotting a tax raid that could see their bills DOUBLE.
TL;DR
- The Chancellor is planning a tax raid on family businesses in the upcoming Budget.
- The proposed change would levy income tax on family firms when transferred to children or relatives, instead of the current capital gains tax.
- This could potentially double the tax bills for these businesses, with income tax at 45% compared to capital gains tax at 24%.
- Retiring entrepreneurs currently use redeemable shares to minimize tax when passing down companies, a method that would be impacted.
- A family with a £1 million firm could face up to £450,000 in tax under the new rules, compared to £240,000 currently.
- This is seen as a second blow to family businesses after a previous cut to inheritance tax relief.
- The changes are projected to generate £300 million per year.
- Critics argue this policy punishes risk-takers and job creators, making it harder to pass down businesses to family.