Being bought out and tax
Discussion
Hi,
My father is considering retiring and at the same time his business partner is wanting to continue and therefore buy his share. It's not large amounts of money as its only a small business (the two of them in a workshop). The question is, what will his tax liabilities be on the value of his half of the business - and, are there any ways of reducing that tax liability? Obviously when it happens it will be dealt with in conjunction with their accountant but its just a case of information up front.
Thanks in advance!
My father is considering retiring and at the same time his business partner is wanting to continue and therefore buy his share. It's not large amounts of money as its only a small business (the two of them in a workshop). The question is, what will his tax liabilities be on the value of his half of the business - and, are there any ways of reducing that tax liability? Obviously when it happens it will be dealt with in conjunction with their accountant but its just a case of information up front.
Thanks in advance!
Entrepreneurs' Relief - reduced tax rate of 10% (vs normal 18% or 28%) on first £10 million of lifetime capital gains arising from disposal of a business/business assets.
https://www.gov.uk/entrepreneurs-relief
https://www.gov.uk/entrepreneurs-relief
Having just been through it, it's funny that the act of closing or selling your shares in a business is one of the few areas where the tax man doesn't screw you.
Funnily enough, entrepreneurs relief was brought in by Labour, and the Tories have somehow resisted the temptation to fiddle with it, for now.
Funnily enough, entrepreneurs relief was brought in by Labour, and the Tories have somehow resisted the temptation to fiddle with it, for now.
There have been provisions to alleviate the CGT on retiring business people for a long time. Don't give Labour too much credit for this. Entrepreneur's Relief was a replacement for the previous relief which was called Retirement Relief.
In the major shake up of CGT performed by Darling in 2008, initially Entrepreneur's Relief was simply abolished. He had to re-introduce it following massive howls of protest from the business sector.
In the major shake up of CGT performed by Darling in 2008, initially Entrepreneur's Relief was simply abolished. He had to re-introduce it following massive howls of protest from the business sector.
Inkyfingers said:
Having just been through it, it's funny that the act of closing or selling your shares in a business is one of the few areas where the tax man doesn't screw you.
Funnily enough, entrepreneurs relief was brought in by Labour, and the Tories have somehow resisted the temptation to fiddle with it, for now.
Apart from doubling it from £5 to £10 million to the benefit of hard working entrepreneurs.Funnily enough, entrepreneurs relief was brought in by Labour, and the Tories have somehow resisted the temptation to fiddle with it, for now.
Eric Mc said:
There have been provisions to alleviate the CGT on retiring business people for a long time. Don't give Labour too much credit for this. Entrepreneur's Relief was a replacement for the previous relief which was called Retirement Relief.
In the major shake up of CGT performed by Darling in 2008, initially Entrepreneur's Relief was simply abolished. He had to re-introduce it following massive howls of protest from the business sector.
Ok, I admit it Eric... You know more about tax than me!In the major shake up of CGT performed by Darling in 2008, initially Entrepreneur's Relief was simply abolished. He had to re-introduce it following massive howls of protest from the business sector.
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