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Great news for business owners wishing to sell their business

In a welcome but surprising move, Chancellor George Osborne has doubled the lifetime limit for entrepreneurs’ relief from £5 million to £10 million.

This increased limit on entrepreneur’s relief will come into effect from April 2011.

This news means that fewer entrepreneurs will face capital gains tax when they sell their business.

The original lifetime limit was set at only £1 million when entrepreneurs’ relief was introduced in 2008. The increase in entrepreneur’s relief is a clear indication that the coalition government recognises the important role entrepreneurs play in our economy as a source for real sustainable employment and revenue generation.

“Increasing the amount of the lifetime limit reduces a barrier to serial entrepreneurs who want to grow their business and reinvest gains, helping to make the UK a more attractive location for entrepreneurs” stated the Treasury.

How does this affect business owners?

Barry Parsons Managing Partner of Hyde House says “This extra tax relief creates a fantastic opportunity for business owners to consider selling up and benefiting from an effective tax rate of only 10%.”

This tax relief is only available to working shareholders that own more than 5% of the business; business owners must have also held the shares for at least a year prior to the sale of the business to qualify.

If you are considering the sale of your business why not talk to an expert broker today to find out how Hyde House can help you take full advantage of the increased lifetime limit.

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