Source: The Tax Specialist Journal Article
Published Date: 1 Aug 2014
This article evaluates the long-awaited changes proposed for the CGT treatment of the problematic area of earnouts. Given that reform to the area is wanting, it is reassuring to learn that the proposed look-through treatment, being theoretically sound, is much welcomed by critics and commentators alike. Rather than viewing the proposal as unworkable or inappropriate per se, this article discusses ways to “fine-tune” the proposed measure and highlights areas requiring further consideration. This will ensure that the proposed measure, when it is eventually enacted, will interact well with existing CGT and general tax laws to guarantee an equitable, simple and consistent CGT treatment for standard earnout arrangements.
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