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Business asset disposal :-s

TAX AND RE STARTING UP

Didn't find your answer?

Does anyone have any information on BADR? 

Now I am selling my shares in my company and resigning due to dispute with my partner . I am 50% shareholder and the business will be continuing. 

I however want to incorporate a new LTD solo and there will be 0 restrictions in the SPA.  

Will I pay 10% or 20% on my gains ? 

I am getting so much conflicting information and not getting anywhere . 

Hope some savvy accountant can help :-) 

Replies (23)

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By David Ex
08th Nov 2021 22:14
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Replying to David Ex:
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By It's nice to be nice
08th Nov 2021 22:26

Hi David
Thankyou for your reply this evening. I can't seem to see anywhere where it gives me the actual information I'm after in regards to what I am allowed to do :-s

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Replying to It's nice to be nice:
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By David Ex
08th Nov 2021 22:39

It's nice to be nice wrote:

Hi David
Thankyou for your reply this evening. I can't seem to see anywhere where it gives me the actual information I'm after in regards to what I am allowed to do :-s

Sounds like you need an accountant. Assume there’s some money at stake for you so guess a modest fee to access competent professional advice will be a good investment.

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Replying to David Ex:
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By It's nice to be nice
08th Nov 2021 22:50

Yes I most definitely agree

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By Paul Crowley
08th Nov 2021 22:47

You need your own accountant as there are negotiations on the exit to be done.
If you start another company, with similar trade, then BADR should be part of that discussion with your accountant

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Replying to Paul Crowley:
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By It's nice to be nice
08th Nov 2021 22:51

Yes I agree too. We are trying to find a new accountant so we have met with a few. Each one says different.

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Replying to It's nice to be nice:
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By David Ex
08th Nov 2021 23:56

It's nice to be nice wrote:

… we have met with a few. Each one says different.

Didn’t think there were more than 2 options in answer to your question so interesting to hear there are “a few”.

Go with a decent professional accountant. They’ll be insured so if they give you incorrect advice you have some comeback.

If you get the wrong steer on here and act on it, that’s your risk.

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Replying to It's nice to be nice:
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By DJKL
09th Nov 2021 09:23

Who is we?

If you mean your current fellow sharehoder you might consider that having your own distinct accountant and solicitor, only acting for you, could be desirable.

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Replying to DJKL:
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By It's nice to be nice
09th Nov 2021 09:52

Yes I do have my own solicitor and new accountant . Which both say what I want them to say . But others say different:-s

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Replying to It's nice to be nice:
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By Leywood
09th Nov 2021 22:07

If they say what you want them to say, as you claim, then get new ones. You need to choose your professional advisors more carefully.

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By Tax Dragon
09th Nov 2021 02:53

Who's buying the shares? (@David Ex if you think about this it could explain why there are more than 2 possible answers to the OP's questions.)

Currently you haven't engaged an accountant. Any comments you've obtained thus far don't really count for much. (A bit like any reply you might obtain in here that looks a bit advisory. It's really not.) If there's a lot of money at stake, invest a bit of time finding a good accountant that can cope with transactional stuff of this type (not all can) and involve him or her with the deal before you sell and resign.

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By Matrix
09th Nov 2021 07:29

Why do you or all these prospective accountants think that BADR may not apply? I take it you have checked the conditions.

You won’t get a definitive answer until you sign up and they go through all the facts.

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By It's nice to be nice
09th Nov 2021 07:58

So , we have an accountant we want to use moving forward.
They say that the 20% would only apply if the previous business went into liquidation. (This is not the case) it is still trading .
One says I can't start a new ltd within 2 years of the same industry or the 20 % would apply.
Another says i am not suppose to work within the same industry for 2 years .

Now I have no restrictions in place :-s

Thanks for all your replies on this guys

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Replying to It's nice to be nice:
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By Matrix
09th Nov 2021 18:40

I wouldn’t go with any of these accountants then. Did the first accountant say that 20% could apply or that income tax rates could apply if there was a liquidation?

(This is hypothetical given there is no liquidation but you seem hung up on BADR applying and the answers you have been given seem to address whether the anti-avoidance rules would result in income tax treatment and not capital treatment.)

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Replying to Matrix:
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By It's nice to be nice
09th Nov 2021 18:46

No the old accountant has said I can claim BADR and pay 10% however , if I was to incorporate a new Ltd within the same industry it will be 20% I would have to pay as I wouldn't be entitled to BADR.

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Replying to It's nice to be nice:
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By Matrix
09th Nov 2021 18:47

Why not? Have you exceeded your lifetime limit?!

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Replying to Matrix:
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By It's nice to be nice
09th Nov 2021 18:55

No . It was My first ever company

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Replying to It's nice to be nice:
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By Matrix
09th Nov 2021 18:59

I don’t think anyone knows yet whether BADR could apply to the sale of a company you have just set up. This relief will probably no longer exist by the time we all retire.

You asked for advice and the advice was to go with a specialist.

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Replying to Matrix:
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By It's nice to be nice
09th Nov 2021 19:01

Yes I have now .I however want them to be certain on the advice they are giving me

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Replying to It's nice to be nice:
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By Tax Dragon
10th Nov 2021 01:34

It's nice to be nice wrote:

I ...want them to be certain on the advice they are giving me

Them give them all the facts and documentation. Or at least answer their questions and give them what they ask for.

For all I know, this was a POOS 4 years after the company was set up and CGT isn't even in point. (That's just a for instance. Which I'm using as an example [of the importance of the facts] because I don't think it's what actually happened - it's better that way, imo.)

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By Tax Dragon
10th Nov 2021 06:55

*Then

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Replying to It's nice to be nice:
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By More unearned luck
09th Nov 2021 21:00

If the company was to be liquidated and you set up a new business to conduct a similar trade then something called the TAAR would, if it applied (there are further conditions to be met), subject the proceeds to income tax, and as BADR is a CGT relief, it wouldn't be of any relevance. That is to say the 'choice' is between IT & CGT not between BADR and normal CGT rates.

But as there is to be no liquidation the TAAR shouldn't apply, although HMRC aver (probably wrongly) in Spotlight 47 that they can apply the TAAR to a sale and give the taxpayer a big fine to boot.

The TAAR is unlikely to apply as a) HMRC are unlikely to assert that it applies in this case and, in any event, b) condition D of the TAAR is not satisfied - the new co is there for commercial reasons and is not part of a tax avoidance scheme.

I repeat the advice of others - get a good accountant.

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Replying to More unearned luck:
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By It's nice to be nice
09th Nov 2021 21:24

Thankyou : )

I can't see how TAAR will apply as the company is not winding up. The ex partner is continuing with it.

I have sold my shares and resigned.

I am most definitely trying to find a good accountant:)

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