McDermott Comment | Boris Johnson Vows to Overhaul Business Tax Regime to Boost Growth After COVID

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Sarah Gabbai, attorney at law firm McDermott Will & Emery, said:

“Regarding the proposed capital gains tax (CGT) rate hikes, I can’t see the Government taxing genuine entrepreneurial risk-taking activities, such as business ownership or long-term private equity investment, at the same rate as activities derived from labour or less risky investments, given the historic policy aim of CGT. However, we may well see tighter criteria for Business Asset Disposal Relief, with Investors’ Relief being abolished altogether, as well as self-employed individuals and company directors in similar situations being taxed at similar effective rates. The OTS is also reviewing tax-efficient share-based incentives to ensure that they are appropriately targeted and do not create distortive cliff-edge boundaries, so we may see, for example, growth shares end up being taxed in the same way as share options.”

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