Autumn Statement: Implications for Professional Practices
Posted On December 4, 2014 By mhauk
Following the chancellor’s Autumn Statement yesterday, Karen Hain, Head of Professional Practices at MHA, the national association of independent accountants, commented:
“The Chancellor’s announcement regarding the changes to the taxation of goodwill on incorporation is not good news for professional practices who were considering changing from a partnership to a limited company status.
Under the old rules, Capital Gains Tax could often be paid at the rate of 10% on the goodwill upon incorporation. These new measures mean that the rate of tax will rise to 18% and in most cases 28%.
Another blow is that the new rules will prevent any tax relief claims by the company for the amortisation of the goodwill. Notwithstanding these changes we still think it is worth professional practices such as solicitors and architects considering incorporating their businesses as the income tax benefits remain intact.
The changes to Stamp Duty Land Tax provide a glimmer of hope for estate agents and solicitors as the reduced rates may stimulate an increase in residential property transactions”.
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