Anonymous
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Entrepreneurs relief

Selling business

A friend of mine is buying shares in a company, they are buying the shares over a number of years through the profits.

my only concern is that if one year they don’t meet the terms then the business reverts back to the previous owner.

the previous owner will have paid 10% tax upfront but if the deal goes south do they not have to pay the extra tax that they would have paid if they had taken dividends?

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20th Jan 2019 22:28

Have to get back to you after I’ve waded through all the detail you’ve provided.

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20th Jan 2019 22:59

You're concerned about the tax position of the person that's had money for nothing, rather than being concerned about the person you call your friend who has spent money but got nothing in return.

Finally I understand why this site provides an "anonymous" option.

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to Tax Dragon
21st Jan 2019 07:19

Is the OP the ‘previous owner’?

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to atleastisoundknowledgable...
21st Jan 2019 08:59

(Something like) that was my guess (too). The answer could depend on it.

A lousy (IMHO) question has been answered well. Tim: tell us more; Dragon: tell us why you are asking; atlea: tell us the transaction; AA: don’t tell us, tell an advisor.

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21st Jan 2019 01:31

Your friend needs a professional adviser.

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21st Jan 2019 08:00

Quote:

A friend of mine is buying shares in a company, they are buying the shares over a number of years through the profits.

I think you mean that ‘they are paying for the shares over a number of years’. And yes, it is relevant.

Edit:
Have you (as your friend’s adviser) considered the personal tax effect of using the company money to pay for their personal liability?

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