Have Tax Questions? Ask a Tax Expert for Answers ASAP
Hello, I'm Keith and happy to help you with your question.
You will be liable for Capital Gains Tax on the gain you make on the sale of your shares to your business partner. This sale will be at full market value to satisfy HMRC. You will almost certainly be entiutled to Enretpreneure'
Sorry my PC crashed and I am continuing.
Entrepreneurs' Relief which limits the taxation to a flat rate of 10% as opposed to the normal 18% or 28% depending on your income including the gain in the atx year of sale.
The value of the business is perfectly simple and as long as the proverbial piece of string. It's theoretical value is irrelevant; it is worth what a purchaser is prepared to pay for it. At a rough stab it would be worth the current property value plus an appropriate number of years purchase of the turnover. Here is a general guide from IFS Proshare as to how unquoted companies might be valued:
I do hope that you have picked up this rather disjointed response.
Hello, on reflection the valuation question should not be posed to you as
a tax person.? do you know of some one who could give a more accurate answer in this field? On the entrepreneurs relief question what information do you need from me to give a more definitive answer?
I wasn't inferring anything, but thought you may have a better idea. Presume someone must be able to give me a ball park figure relating to service businesses. Note some valuations are based on gross profit but i just don't know how to get a basic idea and presume someone would come up with a figure if i wanted to sell?
On the tax question - does business partner mean of a limited company?
Just for clarification if my part of the business was sold for 500 k would Capital Gains be 50k and nothing else? Could i sell the goodwill only of the business secured on a loan to the company over 10 years to limit my liability to tax? eeeeedddd just for clarification if the busi
Thank you Keith that is very helpful. In your opinion would the business value revert to multiples of gross profit if sold as a whole? The business would run quite smoothly without myself and the customer base is of a longstanding nature, so 4 times earnings would still be a fair settlement?
My initial share price is listed as 10 pounds so i would pzy 10 percent of the sale.
i have another question about holiday lettings can i ask you that on this thread?