Upon the sale or ‘disposal’ of all of part of your business you may be able to pay Capital Gains Tax at the reduced rate of 10%.
Entrepreneurs’ Relief means you’ll pay tax at this rate of 10% on all gains made on qualifying assets (subject to any allowances available).
Qualifying transactions include disposing of:
- All or part of your business as a sole trader or business partner having been owner for at least one year before date of sale - including the business’s assets after it closed.
- Shares or securities in a company where you have at least 5% of shares and voting rights (known as a ‘personal company’).
- Shares you got through an Enterprise Management Incentive (EMI) scheme after 5 April 2013
- Employee or officer of the company
- The company is a trading company (rather than non-trading activities like investment) - or it’s the holding company of a trading group
If shares are sold then both of the following must apply for at least one year before you sell your shares:
If all your gains qualify for Entrepreneurs’ Relief
- Work out the gain for all qualifying assets.
- Add together the gains (and deduct qualifying losses) to work out the total taxable gain that’s eligible for Entrepreneurs’ Relief.
- Deduct your tax-free allowance.
- You’ll pay 10% tax on what’s left.
The claim itself is made through your tax return.
How LBW can assist
LBW can provide expert assistance on any gains you make to determine whether the reduced rate of 10% will apply. We also liaise with clients to implement a longer term plan to ensure that we maximise the chances of the conditions being met for the reduced rate.
In order to arrange a free no obligation meeting, please contact:
0151 644 4848