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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I sold my company shares back to the company and with the help

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I sold my company shares back to the company and with the help of the companies accounts secured an agreement that I would get entrepreneurs tax relief on this income. How do I declare this on my on line self assessment and how do I ensure I get the 10% tax relief agreed.

The criteria you and the company need to satisfy for your disposal to qualify for entrepreneurs' relief are set out in HS275 here.

You disclose the gain (proceeds, cost and gain) in the CG pages SA108 here. You put the code for entrepreneurs' relief, ERL (page CGN3), in either box 22 or 28 of page CG2 depending on whether the shares are quoted or unquoted. The gain that you are claiming ER for should also be put into box 4 on page CG1.

I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.

The criteria has been met and I have data to reflect this from the company accountants. From the above I assume that the income from the shares is to be treated as Capital Gains. Your reply indicates that the sum received should be advised by completing box 4 on SA108. From your reply I also conclude that I need to enter the code ERL in either box 22 or 28 depending on whether or not the shares are listed. I am doing my return on line and there is a section which allows me to add any capital gains made. Will the on line system allow me to add the code and how do I advise the tax office that the criteria has already been met and permission granted

The online return will allow you to do all you need to do to get the right figures and the right information in the right boxes.

It's not up to your company to give you permission to claim ER. You either qualify for the relief or you don't. HMRC have a year from when your return is received by them to enquire into it or any aspect of it. That may include looking into your claim for entrepreneurs' relief.
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