Business Sale qualifying for Entrepreneur’s Relief (ER)
March 1st, 2012
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Business Sale qualifying for Entrepreneur’s Relief (ER)
If you sell all or part of your business it may qualify for Entrepreneur’s Relief on the consequent gain & this would mean a tax bill of only 10% of the value of the gain. But there are qualifying conditions to be eligible for ER. After the recent ruling in a high profile case, it emerges that what must be sold is all or part of a business comprising assets which, from the buyer’s perspective can be used to run a stand alone business. It does not matter what the seller’s business is like after the sale. If the assets can be used thus, their transfer is a transaction to which ER will apply.
If the business is run through a Company, ER will not apply as it only applies to gains made by Individuals or trustees. However Company owners can get ER on gains made from selling all or some of their shares, provided an owner is an employee or an officer of the Company & have held at least 5% of more of the voting shares for at least a year before the date of the share sale.
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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