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Tax Breaks for Directors - Part 2 Director shareholders - 21. Selling your company - 21.1. Introduction
21.1. IntroductionThe only tax you should really be concerned about on any profit on disposal is capital gains tax (CGT). Director shareholders who sell all or part of their shareholding in a trading company need to factor the availability of entrepreneurs’ relief (ER) into their planning. The ER tax rate can apply when you sell part or all of the shares in your own company and make a gain of up to £1 million (£10 million before 11 March 2020). The CGT rate for ER is currently 10%.Click here -
Slash Your Tax for Small Businesses - 3. The longer term - succession planning and selling the business - 3.1. Core questions - 3.1.4. What if there’s more than one activity?
3.1.4. What if there’s more than one activity?This will only matter if you just want to sell part of the business, otherwise you can run it as one. It’s worth keeping in mind the potential for sale though.If you run your business through a limited company, there’s some tax planning you will want to do well in advance of there being a sale in prospect. If your business is not incorporated, you will just be able to sell the part of your business as if it’s a distinct and separate business. This can...Click here -
Slash Your Tax for Small Businesses - 3. The longer term - succession planning and selling the business - 3.2. Selling a business personally and liquidating companies - 3.2.1. How might I sell my business?
3.2.1. How might I sell my business?If the business is run through a company, you can either sell your shares or the company can sell the business. If the business is unincorporated, it’s likely to be a straight sale unless you incorporate it with a view to making a sale. If you do, be aware that you could lose BADR unless you hold the shares for two years before the sale.Click here -
Slash Your Tax for Small Businesses - 3. The longer term - succession planning and selling the business - 3.3. Selling a business from a limited company - 3.3.1. How might my limited company sell a business?
3.3.1. How might my limited company sell a business?As is the case of an individual trading alone, a limited company might simply sell its trade and business assets, but the shareholder will retain their shares. Alternatively, it might first transfer the business to a subsidiary company.If the shares are sold in a trading subsidiary, the holding company’s chargeable gain may be exempted from being chargeable to CT by the substantial shareholdings exemption.If the business is sold, chargeable gains will be...Click here -
Slash Your Tax for Small Businesses - 3. The longer term - succession planning and selling the business - 3.4. Preparing incorporated businesses for sale - 3.4.2. What’s a gains group and what’s a degrouping charge?
3.4.2. What’s a gains group and what’s a degrouping charge?A gains group is a group of companies where the parent company in the group owns at least 75% of its subsidiaries and they in turn own at least 75% of their subsidiaries, and so on down the group, subject to the parent at the top of the group having an indirect interest in any company further down the group of more than 50%.ExampleDozy Limited owns 80% of Beaky Limited. In turn Beaky Limited owns 80% of Mick Limited. Mick Limited also has a subsidiary...Click here -
Slash Your Tax for Small Businesses - 5. Taking the profits out of the company tax efficiently - 5.9. Capital accumulation and withdrawal - 5.9.2. What will happen when I finally take the money out?
5.9.2. What will happen when I finally take the money out?If you take it out in income form later on, the tax effects will be the same then as they are now, subject to any changes in the tax system. The company will just be acting as a deferral mechanism. This approach might help give you a constant personal income against a backdrop of fluctuating profits in the company.If you take the accumulated funds out in capital form, you will have a capital gain on which business asset disposal relief (BADR) may be...Click here
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