Brokers warned over earn-out Capital Gains Tax trap

“This hike in the capital gains tax payable on disposal of business assets is triggering a mass exodus as brokers aim to sell up before the 5 April 2008 deadline to minimise their capital gains tax liabilities, but many will be caught out by the structure of the deal,” explains Chris Riley a tax manager with accountancy firm, CLB Littlejohn Frazer.

“Broking firms are typically sold using an earn-out agreement, and payments under such arrangements will probably be made past the new CGT rate