Neil MacGillivray: Business owners beware of potential CGT changes

OTS report

clock • 4 min read

The recommendations that the Office of Tax Simplification (OTS) put forward in its review of capital gains tax (CGT), published on 11 November, has created quite a stir. Neil MacGillivray warns that, if the key proposals are adopted, current CGT planning opportunities may be lost, particularly for owner managed businesses

The OTS report highlights how the CGT rules can distort behaviour and do not meet policy intent, in particular, their interaction with income tax and inheritance tax (IHT). For example, the lower rates of CGT can act as a motivator for owner managed companies to retain accrued income within their company in the hope they can benefit from lower CGT rates on selling or winding up the business. What grabbed the headlines was the key recommendation that CGT rates should be aligned with income tax rates. The closer alignment of rates would reduce the complex rules needed to police the boundar...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Tax planning

CGT tax changes force advisers to rethink planning strategies

CGT tax changes force advisers to rethink planning strategies

‘CGT is no longer a peripheral issue for advisers or their clients’

Jenna Brown
clock 10 March 2026 • 2 min read
Webinar today: IHT on pensions – Advisers' questions answered

Webinar today: IHT on pensions – Advisers' questions answered

Join us on 10 March 2026

Professional Adviser
clock 10 March 2026 • 1 min read
BPR changes versus commercial reality: Minority shareholders in focus

BPR changes versus commercial reality: Minority shareholders in focus

'Someone is sitting in the shade today because someone planted a tree a long time ago'

James Woods-Davison
clock 05 March 2026 • 4 min read