Bad News for some Accountants LLP
Yesterday as part of the Chancellor’s Autumn Statement a loophole involving transferring the goodwill of the business of an LLP (Limited Liability Partnership) into a Limited Company with the same controlling persons has been closed with immediate effect (3rd December 2014).
This is bad news for many accountants who trade through an LLP and could have been looking to transfer their business into a Limited Company. Historically a number of Accountants and Corporate Finance Advisors also recommended this transfer to their LLP clients.
Previously in respect of the transfer from LLP to Limited the gain in respect of the goodwill attributed to the client base was subject to Entrepreneurs Relief and therefore capital gains tax was calculated at just 10%. This was payable in respect of cash or loan notes received. This is no longer available when the transfer is to a closed company where the seller is associated.
More information is available:
Umbrella Accountants LLP specialise in accountancy and tax advice for small owner managed businesses:
Telephone 0800 121 6513