I heard Frankie Boyle defending the fact he could have taken Entrepreneurs' Relief and saved himself a shed load of tax.
Now what is this, and how could one benefit from it?
Now what is this, and how could one benefit from it?
-
-
The rate of CGT on any disposal is dependent upon the individual’s income tax position. Where combined taxable income and gains fall within the basic rate brand of £34,370 the gains element will be taxed at 18%. Where that band is exceeded the CGT rate rises to 28%.Originally posted by Old Hack View Post
However, an important relief is available in the form of Entrepreneurs’ Relief (ER) which ensures that gains which qualify for the relief will only bear CGT rate of 10% on the first £10m of gain. However, gains may have been made since 6 April 2008 which have already used some or all of the ER entitlement available at the time, this may mean that the maximum relief is less that £10m.
Three basic conditions have to be satisfied in order for a gain on shares to qualify:
The company must be a pure trading company or have insubstantial non trading activities
The shareholder must have held at least 5% of the voting rights in ordinary shares in the twelve months leading up to the date of disposal
The shareholder must have been an officer or employee of the company (not necessarily on a full time basis) again for the whole of the twelve months leading up to the disposal. -
Is there any requirement for you to not start another company if you claim ER?"See, you think I give a tulip. Wrong. In fact, while you talk, I'm thinking; How can I give less of a tulip? That's why I look interested."Comment
-
No - this used to be a requirement if applying for the old ESC C16 route to have the distribution classed as capital rather then income.Originally posted by Moscow Mule View Post
I would be careful of going through a series of companies to exploit the ER if each company is essentially the same.
AlanComment
-
Ish - there are rules about transferring the trade out prior to liquidation. See here for an HMRC example.Originally posted by Moscow Mule View Post
I'd suggest for a typical contractor company if you're careful that the first client of Newco is different to the last client of Oldco, use it as an excuse to get a new laptop/phone deal, and have a different enough company name that there's no argument you've transferred the business brand, I struggle to imagine what argument HMRC could use to say the trade was transferred as opposed to a brand new unrelated company being set up...but I would take care to do all of the above to cover your backside.Comment
-
May as well tag on to this existing thread.
With me going perm next week I've got about £50k after Corp Tax sitting in my Ltd account. Would ER now be the best way to take it out?What happens in General, stays in General.You know what they say about assumptions!Comment
-
Yes, almost certainly.
However you can only have £25k out as capital under the new statutory successor to ESC C16, and its all or nothing, £25,001 and you are stuffed. To get the full £50k out you would need to go through a liquidation, search the posts re MVL online on here, haven't used them / no connection, but they seem to have set up a sensible solution for this.Comment
-
Just do ER twice. Easy.Originally posted by Jessica@WhiteFieldTax View Post'CUK forum personality of 2011 - Winner - Yes really!!!!
Comment
-
Or pay 25k in divis and cough up the tax and then get the remaining 25k.Originally posted by Jessica@WhiteFieldTax View PostThe material prosperity of a nation is not an abiding possession; the deeds of its people are.
George Frederic Watts
http://en.wikipedia.org/wiki/Postman's_ParkComment
-
Comment