The reported plan to charge income tax on family business transfers could raise about £300m a year, according to a Brit Brief round-up of Budget leaks citing the Telegraph.
Brit Brief says Chancellor John Healey is reportedly considering scrapping the 'redeemable shares' route. This lets a family convert its holdings in a business into shares that the firm can buy back using its profits. Owners handing a firm to their children then pay capital gains tax rather than income tax.
According to Brit Brief, the current route attracts capital gains tax at 24% for higher-rate payers, against 45% for income tax.
The £300m figure comes secondhand, from Brit Brief's account of the Telegraph's reporting, and has not been independently checked. The Treasury has not confirmed the plan or the figure. Until the measure appears in the Budget statement on 28 October or is confirmed by the Treasury, it remains a reported proposal.