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Where Taxpayers and Advisers Meet
Selling a business
-
Nigel Lord
- Posts:518
- Joined:Wed Aug 06, 2008 2:18 pm
Ensign
In your circumstances the most advantageous route would probably be to sell the shares. If this is not possible, you may need to undertake some form of reconstruction (a hive down or members liquidation) to achive an optimum result. Otherwise there is a danger of a double tax charge (corporation tax and capital gains or income tax).
Assuming that you sell the shares and you have been engaged in a qualifying trade for at least 2 years, you and you wife will be entitled to business asset taper relief exempting 75% of the gain. Therefore your effective rate of CGT cannot exceed 10% = £40,000.
You will also be able to deduct the cost of your shares (plus indexation if acquired prior to 5 April 1998) and the costs of sale. Finally, you and your wife will be entitled to use unused anual CGT exemptions (£7,900) each.
There are a number of sophisticated planning strategies available (use of trusts, deferral of tax by reinvestment, separate sale of company assets, pension planning, maximising the use of lower and basic rate bands, emigration - temporary or permanent, etc.). If you require detailed advice you should seek a professional consultation.
My firm specialises in this area of taxation. If you would like us to assist you further we would be delighted to do so.
Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk
In your circumstances the most advantageous route would probably be to sell the shares. If this is not possible, you may need to undertake some form of reconstruction (a hive down or members liquidation) to achive an optimum result. Otherwise there is a danger of a double tax charge (corporation tax and capital gains or income tax).
Assuming that you sell the shares and you have been engaged in a qualifying trade for at least 2 years, you and you wife will be entitled to business asset taper relief exempting 75% of the gain. Therefore your effective rate of CGT cannot exceed 10% = £40,000.
You will also be able to deduct the cost of your shares (plus indexation if acquired prior to 5 April 1998) and the costs of sale. Finally, you and your wife will be entitled to use unused anual CGT exemptions (£7,900) each.
There are a number of sophisticated planning strategies available (use of trusts, deferral of tax by reinvestment, separate sale of company assets, pension planning, maximising the use of lower and basic rate bands, emigration - temporary or permanent, etc.). If you require detailed advice you should seek a professional consultation.
My firm specialises in this area of taxation. If you would like us to assist you further we would be delighted to do so.
Nigel Lord
Lord Associates
Taxation & Business Consultants
Caxton House
Old Station Road
Loughton
Essex, IG10 4PE
020 8418 9101 & 07769 931852
mail@lordassociates.co.uk
