Hello, I'm Keith and happy to help you with your question.
The disposal of your Czech company would normally expose you to UK Capital Gains Tax (CGT) on any gain you make.
It is likely that you would be entitled to Entrepreneurs' Allowance (EA) which reduces the rate of tax to a flat 10% on any gain over your Annual Exempt Amount (AEA) of 11K [14/15 rates]. EA must be claimed with about 2 years eg 14/15 tax year by 2016. However, you may be able to defer paying this tax through Incorporation Relief. To benefit from this you must [Gov UK advice}:
'You may be able to delay paying Capital Gains Tax if you transfer your business to a company in return for shares. Incorporation Relief means you won’t pay any tax until you sell (or ‘dispose of’) the shares.
To qualify for Incorporation Relief, you must: be a sole trader
or in a business partnership transfer the business and all its assets (except cash) in return for shares in the company'
through which your payment is deferred. Your entitlement to AEA will still be there should you require same. No funds will be needed immediately pursuant to this transaction.
This answer does not consider any effects that the transaction may generate under the Czech taxation regime. Ant tax paid there would be allowed as a tax credit against any UK tax liability on the same transaction under the Double Taxation Convention which has been entered into to preclude such levies being made in both jurisdictions.
I do hope I have been able to shed some light on your position.
Thanks. I forgot to mention that I am not a UK tax resident. I live in the czech republic.
In this case there would be no CGT payable correct?
Well that rather does change things somewhat! In such a case you would not have any UK CGT liability unless, in the year of sale, you had spent more that 183 days resident in the UK.
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