No trading company – No problem?
Many company owners hope to claim business asset disposal relief (BADR) (formerly known as entrepreneurs’ relief) on an eventual sale of their shares, to benefit from the special capital gains tax rate of only 10%. The small print In most cases, the BADR provisions on a share disposal require that certain conditions are satisfied for […]
Entrepreneurs’ relief: The elephant test
A ‘trading company’ can sometimes be difficult to identify for capital gains tax ER purposes. To make matters worse, the statutory definition is relatively brief. Whilst HMRC’s guidance is helpful in many cases, it is only that – guidance, not legislation, so does not have the force of law. At times, it is necessary to […]
Investors and entrepreneurs – There’s a (tax) difference!
Individual business owners may be aware that a capital gains tax (CGT) rate of only 10% can apply if entrepreneurs’ relief (ER) is available on qualifying business disposals, up to a lifetime limit of £10 million. A relatively newer and less well-known relief, investors’ relief (IR), also provides for a reduced CGT rate of 10% […]
Investors and entrepreneurs – There’s a (tax) difference!
Individual business owners may be aware that a capital gains tax (CGT) rate of only 10% can apply if entrepreneurs’ relief (ER) is available on qualifying business disposals, up to a lifetime limit of £10 million. A relatively newer and less well-known relief, investors’ relief (IR), also provides for a reduced CGT rate of 10% […]
Alphabet shares are dead…long live alphabet shares!
Amongst the detail of the Budget 2018 were some tweaks to the entrepreneurs’ relief legislation, which led to a lot of speculation and commentary. Did the proposed change to the definition of a ‘personal company’ (in TCGA 1992, s 169S(3)) mean the end to alphabet shares? To set some context first, ‘alphabet shares’ is the […]
Alphabet shares are dead…long live alphabet shares!
Amongst the detail of the Budget 2018 were some tweaks to the entrepreneurs’ relief legislation, which led to a lot of speculation and commentary. Did the proposed change to the definition of a ‘personal company’ (in TCGA 1992, s 169S(3)) mean the end to alphabet shares? To set some context first, ‘alphabet shares’ is the […]
Company Purchase Of Own Shares: Exit With Care!
A company purchase of own shares (CPOS) can be a useful ‘exit’ strategy for shareholders in the right circumstances. This article looks at the purchase by an unquoted trading company of its own shares from an individual shareholder of a family or owner-managed company. As a general rule, when the company buys back its own […]
Company Purchase Of Own Shares: Exit With Care!
A company purchase of own shares (CPOS) can be a useful ‘exit’ strategy for shareholders in the right circumstances. This article looks at the purchase by an unquoted trading company of its own shares from an individual shareholder of a family or owner-managed company. As a general rule, when the company buys back its own […]
Share Disposals And Anti-Avoidance – Decisions, Decisions!
When an individual shareholder sells shares in a ‘close’ family or owner-managed trading company, he or she will probably expect the proceeds to be treated as a capital receipt. If the individual is liable to capital gains tax (CGT) on the share sale, in many cases the tax rate will be 20% (for 2018/19), although […]