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Where Taxpayers and Advisers Meet

Sale of Company and Cash Settlement

Joined:Tue Nov 05, 2019 11:22 pm
Sale of Company and Cash Settlement

Postby JB11 » Tue Nov 05, 2019 11:28 pm

Hi, a private company I owned shares in was recently sold in its entirety to a third party on a cash-free, debt-free basis. I received a payment of 20k on completion and then a further 3k in respect of the cash remaining in the business at the completion date. I understand the 20k I received will be subject to CGT but an unsure as to how the 3k I received from the cash remaining in the business should be treated - will this be subject to CGT or to income tax possibly based on dividend payment? Thanks.

Joined:Wed Feb 08, 2017 2:33 pm

Re: Sale of Company and Cash Settlement

Postby AnthonyR » Thu Nov 07, 2019 10:38 am

You'll need to find out where that cash came from and how it was accounted for.

It's likely that it was a dividend of all cash prior to sale to clear out the company bank account, but it's impossible to tell without more info so you'll need to speak to the directors/shareholders/lawyers to find out.
Anthony Rogers LLB CTA TEP
Fusion Partners LLP

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