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Alert for family firms.

ANY increase in capital gains tax (CGT) for business assets could have a damaging effect on family-owned firms and their ability to grow and be successful, according to the Institute for Family Business.

The IFB has written to Mark Hoban MP, Financial Secretary to the Treasury, calling for the CGT rate for business assets to be held at the current rate of 18%.

Grant Gordon, IFB director-general, said: "If we are to encourage wealth and job creation we must maintain strong incentives for family business entrepreneurs to invest, so it's crucial that the Government doesn't raise the tax rate on business assets."

Due to their ownership structure, reliefs from CGT for business assets are crucial for investment in family businesses.

Families often invest funds collectively in their business.

Often the equity investment of family shareholders who are not involved in management roles is vital to the success and growth of the business.

The IFB believes that if there is a particularly onerous definition of business assets, then investment into certain types of family business could become significantly less attractive.
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Publication:The Journal (Newcastle, England)
Date:May 29, 2010
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