Winding down on retirement
February 15th, 2010
If you have built up profits in your own company and now want to retire, selling the company or winding it up would result in a one-off capital gains tax at a rate of 10% by claiming Entrepreneurs’ Relief (ER) on the profit on disposal.
Alternatively, you could consider keeping the company running and release the profits through the payment of dividends over a number of years. Tax-free allowances and rate bands can be used to maximise the dividend payable each year. Transferring some of the shares to your spouse could mean that they too can withdraw dividends to utilise their tax-free allowances and lower rate tax bands.
The content of this article is for general information only. It should not be relied on and action which could affect your business or personal circumstances should not be taken without appropriate professional advice.
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