Clause 45 - Taper relief: holding period for business assets
Finance Bill
12:15 pm
Mr Chris Grayling (Epsom and Ewell, Conservative)
I rise to address a couple of points, the first of which follows on from the comments made by my hon. Friend the Member for Arundel and South Downs.
On business and non-business assets and potential changes of status in relation to an organisation, Ministers need to be mindful of the situation that can often exist in the early stages of the formation of a business, and in particular the stages in its development when it is backed by venture capital. It is often the case that a person who sets up a business does not end up leading it further down the track. It is very common for somebody to take a business through its first, and possibly its second, round of financing, and then discover that as the business becomes established and developed the investors who are supporting it bring in an additional group of managers to add new experience to it. Very often the person or persons who founded the business may find themselves moving on, retaining shareholdings and no longer working for the company. It is important to tackle that anomaly because it could have an adverse effect that we would not want on entrepreneurial groups in our society and I hope that the Economic Secretary will give that due consideration.
Secondly—I refer hon. Members to my declaration in the Register of Members' Interests—I want to probe the status of property assets with the Economic Secretary. In which cases will property assets become business assets? In relation to the burgeoning residential property market and people's involvement as investors in that marketplace, what is the status of property under clause 45? In which circumstances, if any, will it be classified as a business asset?