David Jetuah, Accountancy Age, Friday 18 June 2010 at 10:00:00

Tycoon says entrepreneurs relief does not provide enough incentive

Lord Sugar has criticised the capital gains tax regime, adding his voice tothe chorus of dissent from businesses and MPs.

The tycoon called a debate in the House of Lords yesterday, warning that thecurrent tax breaks for entrepreneurs were inadequate,theDaily Telegraph reported.

Entrepreneurs' relief provides business owners with a one-off 10% rate forthe first 2m of capital gains. They are then taxed at 18% for any furthergains.

"In this day and age [2m] falls short of the aspirations of real growthcompanies," Lord Sugar said.

"Payout [on exit] is the ultimate goal for such entrepreneurs and theiremployees who have been incentivised with approved share option schemes."

Lord Sugar also said the proposed hike for non-business assets would damagethe UK economy as business owners became disillusioned.

"Raising capital gains tax rates will... depress their desire to work hardand the most devastated will be those business or asset owners who have workedhard and are reaching an age where they are wishing to consider a sale," LordSugar said.

Further reading:

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17,000sign up to CGT petition