GPC calls for capital gains tax exemption for GP practices

Exclusive - Tax break would encourage investment in premises.

The BMA is considering asking the government to exempt GP practices from capital gains tax on property, GP can reveal.

GPC negotiator Dr Peter Holden said that the move would encourage the profession to invest more in its premises.

'Why would I want to move to new premises, if it meant a huge tax bill?' he told GP. 'Turkeys don't vote for Christmas.'

Capital gains tax is currently charged at 18 per cent, although practices can claim 'entrepreneurs' relief', lowering this to 10 per cent.

This means that GPs can face a huge tax bill when selling premises, even if they plan to reinvest in new buildings.

Dr Holden said that the tax explains much of GPs' reluctance to move. Senior partners nearing retirement see little point in investing in new premises if it means paying a capital gains bill, he said.

'There's an argument for an industry-wide exemption when a doctor sells up to move to better premises,' he said.

The move would do much to increase bankers' interest in safe investments such as practice premises.

Dr Holden said it was early days, but the GPC was considering approaching the government with the idea. He denied that it could be politically difficult to give preferential status to GPs, pointing out: 'The government gives tax breaks to petroleum companies.'

However, Laurence Slavin, an accountant with Ramsay Brown & Partners, warned there was no precedent for such an industry-wide exemption.

It would be more realistic to approach PCTs for compensation for capital gains tax bills, he added.

jonn.elledge@haymarket.com

Comment below and tell us what you think

Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register

Already registered?

Sign in