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What retirement relief is available to business disposals on

Resolved Question:

What retirement relief is available to business disposals on retirement?
Submitted: 10 months ago.
Category: Tax
Expert:  Sam replied 10 months ago.

HI

Thanks for your question

Could you advsie further

What is being disposed of -Is it the business or assets

Is this a sole trader or limited company - if a limited company will there still be remaining directors, or if a sole trader will you sell just your share of the business and to whom , a third party or other partners or directors

Thanks

Sam

Customer: replied 10 months ago.
The whole of the share capital of a private limited company (not family) with no remaining directors. Sale to a USA based company
Customer: replied 10 months ago.
The sale is, of course arms length
Expert:  Sam replied 10 months ago.

Hi

Thanks for your response

Then as you will be selling the shares of an ongoing limited company then could benefit from your capital gain rate just being at 10% (so the first £11,100 exempt as this is the annual exemption allowance) and the remaining gain at 10% (rather than a mix of 18% or 28%)

Link here as to who applies for this entrepreneurs relief https://www.gov.uk/entrepreneurs-relief/eligibility

Basically you need to

  • have shares or securities in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’)
  • The company has been trading for at least one year prior to sale in which you owned for at least one year
  • The company trades rather then deals just in investment

If you think that you qualify based on the information above then do let an accountant work along with the legal team to make this sale to make sure you remain in a qualifying position

And thanks for letting me know its an arms length sale - always essential

Do let me know if I can be of any further assistance - but if you have all that you need then it would be appreciated if you could rate me for the level of service I have provided (or click accept)

Thanks

Sam

Expert:  bigduckontax replied 10 months ago.

You should be aware that from 6 April 2016 the rate of Capital Gains tax is at 10% and 20% not 18% and 28% unless residential property in involved.

bigduckontax, Accountant
Category: Tax
Satisfied Customers: 3603
Experience: FCCA FCMA CGMA ACIS
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Expert:  bigduckontax replied 10 months ago.

Thank you for your support.

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