Different BADR situation

[Archangel]

I’m planning to sell my business, well, most of it! Anyone have any thoughts/useful links?

I can either sell my whole business (all the Ltd company shares) and retire. I think the amount I sell the business for will qualify for BADR according to the BADR page on Gov.uk

I’d prefer to spin off part of the business (which accounts for around 20% of the turnover) and keep this going myself and sell the rest of the business. I could create a new Ltd and transfer the assets I need to this business before selling the old Ltd.

would I then still be able to claim BADR on the proceeds of the sale? The new business would be operating in loosely the same trade as the old company (it’s basically the online arm of a bricks and mortar business).

I appreciate this is probably outside the usual contractors experience (the business started as a plan b and became plan a) but hopefully someone could point me to any relevant legislation.

ta

[Maslins]

I'd strongly recommend you get proper tax support around this. Yeah there are some things where DIY'll often turn out ok...but this isn't one of them.

Liaise with your existing accountant. If you either don't have one, or you have more faith in fellow contractors here than your accountant, then get a good one. Email/ring round a few local to you, have a proper chat with someone, and take it from there.

[Archangel]

What questions would I ask an accountant to see if they would understand this situation? (Or would this be so common that any accountant could advise?)

ta

[jamesbrown]

Or you could just go with Maslins, since Chris also runs MVL Online

[eek]

Or you could just go with Maslins, since Chris also runs MVL Online

MVL Online is (from memory) designed to be a low cost low hassle solution for simple, straightforward situations.

The OP's situation definitely doesn't meet that scenario and proper advice is required

[Maslins]

What questions would I ask an accountant to see if they would understand this situation? (Or would this be so common that any accountant could advise?)

I imagine your questions will revolve around whether you sell the shares of your company, or you keep the shares but the company sells some of the trade and assets...or what you potentially suggest which is your existing company sells some of the trade and assets to a new company you set up, then you sell the shares in the original (now reduced scope) company. Establish what will be the tax impact of each stage. Consider that alongside the practical impact (ie things you do/don't want to keep), and what amount you may get for each option. Indeed the latter may be a primary consideration. Do you have any buyers lined up? If no, or perhaps just one, no point planning things around exactly what you want if no buyer's interested in the bit left.

If the numbers involved are significant, I'd avoid your typical contractor specialist accountant. A typical high street/traditional firm with 5+ staff would almost certainly have the in house expertise to advise.

Or you could just go with Maslins, since Chris also runs MVL Online

I was in no way hinting at that, indeed not something either of the above firms would be suitable to assist with!

[jamesbrown]

MVL Online is (from memory) designed to be a low cost low hassle solution for simple, straightforward situations.

The OP's situation definitely doesn't meet that scenario and proper advice is required

No, sure, I mean it is evidence of an accountancy practice that knows a thing or two about liquidations.

[jamesbrown]

I was in no way hinting at that, indeed not something either of the above firms would be suitable to assist with!

No, I think it was me hinting at that...

But if you're saying that you couldn't handle the accountancy side of it either, then fair enough.

[Archangel]

I imagine your questions will revolve around whether you sell the shares of your company, or you keep the shares but the company sells some of the trade and assets...or what you potentially suggest which is your existing company sells some of the trade and assets to a new company you set up, then you sell the shares in the original (now reduced scope) company. Establish what will be the tax impact of each stage. Consider that alongside the practical impact (ie things you do/don't want to keep), and what amount you may get for each option. Indeed the latter may be a primary consideration. Do you have any buyers lined up? If no, or perhaps just one, no point planning things around exactly what you want if no buyer's interested in the bit left.

If the numbers involved are significant, I'd avoid your typical contractor specialist accountant. A typical high street/traditional firm with 5+ staff would almost certainly have the in house expertise to advise.

thanks for the detailed reply.

I have an interested buyer, but they are not really interested in the online side, just the bricks and mortar. Due to a long lease assigned to my Ltd the buyer will have to buy the Ltd rather than assets and goodwill. The online side is something I can do in a day or two a week and would provide a nice income to top up my pension. The sums involved are not overly large, but into 6 figures, so paying for advise is not a problem, it’s more knowing who to pay! I’ve been burnt twice in the past by poor accounting advise, both times by (different) one-man bands.