A client of mine is involved with an LLP.
The LLP has two limited company partners and no individuals as partners.
My client is one of the limited company partners and that company is owned on a 50/50 basis.
The LLP is planning to set up a limited company as a trading subsidiary.
My client is convinced that in two years time when the trading subsidiary is sold he and his business partner in the 50/50 company will get Entrepreneur's relief.
I'm not convinced for two reasons.
1. The rule change on 18 March
2. The LLP would be making the gain on the sale and the gain would form part of its profit distributed to its partners and therefore tax at corporation tax rates.
Help!
Replies (4)
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Ask your clients what gain they think they will be able to claim ER on.
As you say the gain will be made by their company not by them.
Then ask him how he, rather than his company, will have a gain. He can't have a gain on selling something that is not his.