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Where Taxpayers and Advisers Meet

CGT/entrepreneurs relief and deferred consideration

hardy
Posts:46
Joined:Wed Aug 06, 2008 4:04 pm
CGT/entrepreneurs relief and deferred consideration

Postby hardy » Thu Nov 22, 2018 4:28 pm

I have a client who has sold his 5.04% holding of shares in a company.
He received £35000 in cash in October 2017 and is entitled to a further earn-out payment in Spring 2019 which is dependent of the Revenue of the firm for the 12 months following the signing of the sale agreement.
There is also the potential of a kicker consideration if the Revenue in the earn-out period exceeds a certain figure.
How should this all be treated for CGT and entrepreneurs relief given that we don't know what the 2 further payments are going to be?

AdamS93
Posts:268
Joined:Tue Sep 26, 2017 6:28 pm

Re: CGT/entrepreneurs relief and deferred consideration

Postby AdamS93 » Thu Nov 22, 2018 5:26 pm

Marren v Ingles is probably what you’re after. It depends on whether the consideration is fixed or variable.

hardy
Posts:46
Joined:Wed Aug 06, 2008 4:04 pm

Re: CGT/entrepreneurs relief and deferred consideration

Postby hardy » Thu Nov 22, 2018 10:17 pm

Thanks


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