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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15950
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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Tony (Tax) - I am seriously considering ordinary shares l own

Resolved Question:

Tony (Tax) - I am seriously considering ordinary shares l own in a private closed limited company. The sale price is fixed although l will be paid over a number of years. is there any advice you can give me in order to help mitigate my forth coming Tax bill. Thank you
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

If you qualify for entrepreneurs' relief on the share disposal, any CGT liability will be restricted to 10% of the gain and you should be able to pay the tax in instalments. As the rate of CGT on gains not qualifying for ER is charged at 18% or 28% or a combination of the two rates depending on the level of your income, the lower your income is the lower the CGT will be as a consequence. The qualification rules for ER are set out in HS275.

If you reinvested the sale proceeds into a new business asset as described in HS290 you can defer the CGT but you will lose out on entrepreneur's relief on the initial disposal.

I hope this helps but let me know if you have any further questions.
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