The Autumn Statement also brought welcome news for doctors who are building up private earnings and would at some point want to make use of Entrepreneurs Relief.
As a background, if you are a doctor who has accumulated funds within a Limited Company for your private fee work, if you eventually dispose of the shares in your company for say, £400,000, normally capital gains tax would be payable at 28% (for higher rate tax payers). However as long as your Limited Company satisfies various conditions, the sale should be good for Entrepreneurs Relief - reducing the capital gains tax to 10% - or in this case £40,000.
When faced with this £40,000 tax bill - the doctor could defer the liability to tax by re-investing the gain in an Enterprise Investment Scheme.
The change announced in the Autumn Statement was that when you finally dispose of shares in the Enterprise Investment Scheme, and the gain becomes chargeable to tax again, the previous 10% capital gains tax would apply (previously the tax would revert back to normal capital gains tax rates). Therefore, Entrepreneurs Relief is preserved even if you are a doctor who re-invests any gains on their private company in an EIS.
If you would like more information on how best to preserve your private income earnings then get in touch on firstname.lastname@example.org or 0117 966 5699.