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Where Taxpayers and Advisers Meet

Entrepreneurs Relief and Continued Employment

Joined:Sun Feb 07, 2010 6:33 pm
Entrepreneurs Relief and Continued Employment

Postby businessmind » Thu Jun 06, 2019 8:44 pm

Myself and my business partner are each 50% shareholders in our trading business which has been established for in excess of 10 years, we are also both employees of the company. In agreement with my business partner I am looking at selling my shares back to the company, thus extinguishing them and making him a 100% shareholder. I would like the receipt to have a capital treatment and consequently be eligible for entrepreneurs relief. My business partner would like me to stay on as an employee for a period of time after I dispose of my shareholding. Will this compromise the ability for it to be a capital treatment? If so can anyone suggest a workaround (i.e. a staged exit)?

Joined:Wed Aug 02, 2017 9:09 pm

Re: Entrepreneurs Relief and Continued Employment

Postby darthblingbling » Fri Jun 07, 2019 7:44 am

Staying on as an employee sounds like it may fail the for the benefit of the trade condition, as it's fairly subjective. Guess it depends what employment duties you will be carrying out.

There is a statutory clearance framework in place. As this transaction sounds like it will be worth a lot of money to you if done right, I'd engage a professional tax advisor to ensure it's done correctly and not rely on advice from a free forum.

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