'Retire quickly or you may lose out'
GPs planning to retire could pay thousands of pounds more in tax unless they dispose of their surgery and other assets before next April, medical
accountants have warned.
They would face extra tax be- cause retirement relief on capital gains disappears on April 5.
Retirement relief can potentially 'extinguish' tax liability on a capital gain, according to David Hubbard, partner at accountants Griffin Chapman, but is being replaced by a new, less-favourable system.
Under current arrangements, if a GP makes a capital gain of £200,000, retirement relief is gained on £125,000.
Further taper tax relief of 75 per cent, for the disposal of a business asset held for more than two years, plus annual exemptions, takes the remaining £75,000 gain down to £11,000. This is taxed at 40 per cent.
When retirement relief is axed, a £200,000 gain will have 75 per cent taper relief on the entire sum. The end result will be that GPs have 40 per cent tax to pay on £42,300.
'That's not so favourable,' said Mr Hubbard. 'It's difficult to generalise, but if you are thinking of retiring and have a gain you would be
better to retire shortly.'