There exists a glaring omission in the new Capital Gains Tax rules - they did not address earn-outs. Thousands of entrepreneurs who sold their businesses in 2005/06 have until 31st January to sort out a CGT tax nightmare for which HMRC issued no guidelines whatsoever.
This affected those people who are receiving part of their payment for their business in shares or loan notes as an earn-out (deferred payment). They had to tell HMRC before the end of January whether they were paying the CGT immediately or deferring it until they are able to cash the shares/loan notes in. The consequences of making a wrong decision can be enormous.
Thanks to PKF (UK), who provided the following illustration of this problem:
Highly experienced team in place, with a suitable candidate to fill an upper-level management position, if required. Serves a large regional client base, with clients operating in industry sectors including education, healthcare and facilities.
Strong pipeline of future work, which is currently valued at £2m. Provides over 2,500 unique automotive engine components for a comprehensive range of leading brands, catering to OEMs and wholesalers worldwide.
SIA / Safe Contractor approved, manned security and accredited training course specialist with impressive nationwide reputation and client base.
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