Q. I read your recent comments on earn out rights and the budget changes proposed for their CGT treatment.I previously sold a business in 2003 with an earn out right.It was paid out in December 2007. Will this budget change provide any relief for my situation?
A. Unfortunately the most likely answer is no. At this stage we only have the budget announcement about the change so we will need to wait and see the detail of the legislation to enact the change.
However the budget indicated that the effective date for the change would be the date of Royal Assent to the amending legislation with some transitional arrangements being provided from 17 October 2007. From your information it sounds as though your CGT event and most of your earn out rights occurred prior to this date.
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