Share this content

Entrepreneurs relief

Entrepreneurs relief

Didn't find your answer?

A company has ceased trading and is looking to voluntarily dissolve. The director wishes to relinquish his shares and take the monetary assets from the business. There are no other business assets to sell. The amount involved is below the capital gains allowance. Does he need to request entrepreneurs relief from HMRC, or simply declare the gain on his self assessment 2015-2016.

Many thanks

Replies (5)

Please login or register to join the discussion.

By johngroganjga
04th Jun 2015 11:07

He doesn't need to claim it separately from the return on which he declares the gain.

But from what you say it's academic as there will be no gain to be taxed.

Thanks (0)
avatar
By jam2
04th Jun 2015 15:52

Many thanks. That's what I thought, but just wanted to double check, as I think entrepreneurs relief will be one of the things addressed in the upcoming budget.

Thanks (0)
avatar
By Steve Carlson
04th Jun 2015 17:52

ER is a red herring

If the gain is below the CGT AE then it doesn't matter whether he gets ER or not as there will be no tax to pay. 

 

Thanks (0)
Replying to johnt27:
By johngroganjga
04th Jun 2015 18:30

What?

Steve Carlson wrote:

What you need to be careful about is that ... the monetary assets are classed as distributable reserves and are not tied up in share capital.  

Providing that is the case, then you should get capital treatment with no tax to pay.  

If the monetary assets are part of the share capital though, then make sure you do a capital reduction before striking off.

What on earth is this about?

On what basis is capital treatment not available, and tax payable, if the entirety of shareholders' funds is share capital?  And what on earth would be the reason for doing a capital reduction if it was.

Thanks (0)
avatar
By Steve Carlson
04th Jun 2015 17:52

Mind in two places

Sorry - I was thinking of two cases at the same time and ended up talking gibberish! I'll edit the comment to save confusing anyone else.

Thanks (0)
Share this content