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Labour Advisers Revolt Over Tax Reform

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Umm, so at the same time as the makebelieve financial/debt economy goes up the swanee investment in other areas is likely to tun elsewhere at the same time.

Well done Brown.

This has nothing to do with the PE market, this is just grabbing some tax back from wherever Brown thinks he can get away with it. Brown is now running ultra-short term economic policies.

http://www.telegraph.co.uk/money/main.jhtm...11/cntax111.xml

Labour advisers revolt over tax reform

By Richard Tyler, Enterprise Editor

Last Updated: 12:15am BST 11/10/2007

Alistair Darling has suffered a ferocious backlash from his own business advisers over his decision to raise the rate of capital gains tax (CGT) paid by entrepreneurs and their staff by 80pc.

....

"Investment in small businesses and entrepreneurship has been penalised. It sends all the wrong signals for Government support of small business," he said.

....

John Cridland, its deputy director general, said: "The Chancellor's move on capital gains tax will have an impact far beyond the important private equity sector. It will discourage investment right across the economy and entrepreneurs who have toiled to build up businesses from scratch will be particularly hard hit. The Treasury needs to think very carefully about the signal this decision sends out on enterprise."

...

"We have been approached by Ireland to move there and they will guarantee the rate of corporation tax at 10pc until 2021. Our future start-ups and investments are likely to be outside the UK in a tax regime we can trust," he said.

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"We have been approached by Ireland to move there and they will guarantee the rate of corporation tax at 10pc until 2021. Our future start-ups and investments are likely to be outside the UK in a tax regime we can trust," he said.

This will not make a blind bit of difference unless all the business is to be conducted in Ireland and the owner is not UK resident when / if they sell their business.

If doesn't matter if the company is set up in Ireland if it is being run from the UK. HMRC will say the company has a permanent establishment in the UK and tax it anyway! Plus UK resident individuals are taxed on their world wide income so if they sell an Irish company they will still pay tax in the UK.

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This will not make a blind bit of difference unless all the business is to be conducted in Ireland and the owner is not UK resident when / if they sell their business.

If doesn't matter if the company is set up in Ireland if it is being run from the UK. HMRC will say the company has a permanent establishment in the UK and tax it anyway! Plus UK resident individuals are taxed on their world wide income so if they sell an Irish company they will still pay tax in the UK.

Simple, shift the permanent establishment OUT of the UK.

UK individuals (small businesses) will simply not bother to take the risk in a higher tax environment.

Many businesses are going to sell off/shut themselves down before April next year. It would be madness not to, they will lose years/possibly decades inflation protection on their original investment. Brown is going to tax a an initial investment sum like it was invested yesteday, mind you Brown is like that to him inflation and the debasement of earnings/orignal invesment and currency doesn't exist.

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Simple, shift the permanent establishment OUT of the UK.

UK individuals (small businesses) will simply not bother to take the risk in a higher tax environment.

Many businesses are going to sell off/shut themselves down before April next year. It would be madness not to, they will lose years/possibly decades inflation protection on their original investment. Brown is going to tax a an initial investment sum like it was invested yesteday, mind you Brown is like that to him inflation and the debasement of earnings/orignal invesment and currency doesn't exist.

What about if you just move out of the UK for a year to maybe ireland or wherever the tax regime is favourable and then sell up?

I have a small business myself so always looking at ways to avoid being shafted

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Simple, shift the permanent establishment OUT of the UK.

Not that easy - otherwise who would set up a company in the UK?

Basically, if you have someone in the UK concluding contracts on behalf of the Irish company then a permanent establishment would be created. There are lots of other indicators of a permanent establishment i.e having an office etc.

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What about if you just move out of the UK for a year to maybe ireland or wherever the tax regime is favourable and then sell up?

I have a small business myself so always looking at ways to avoid being shafted

It is a looong time since I have done any personal tax work but it use to be the case that you could just be non tax resident in the year you sold your assets. I believe however that HMRC cottoned on to this and you may need to stay out of the UK for a bit longer now. If you are serious take a llok at the Capital Gains Tax and Corporation Tax Act 1992 (probably section 10A temporary non-residents).

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