I have a client working in IT and they have a fee base of customers paying a monthly standing order for IT services that can be called upon.
The client is a small Ltd company owned and operated by a lady with her husband as a 2nd director.
My client has been approached by another IT company wishing to purchase her client list and fee base but NOT the Ltd company (the shareholding) and this fits in with her vision as she is now ready to retire from the busy working life and concentrate on other things (like hobbies etc.).
The question is what would be the tax implications to this? On first thought, CGT route may be appropriate but would she also be elegible for Entrepreneurs Relief? However, on doing some research, it would appear that the sale would have to go through the Ltd company and therefore chargeable to CT but then when she extracts those funds (sells back shareholding) she will then be subject to income tax on the proceeds - effectively being taxed twice for the same transaction.
Is this correct or is there an alternative way that I have not seen?