Entrepreneurs' Relief (ER) - how does it work?

How to calculate Entrepreneurs' Relief

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By sb123456
03rd Dec 2016 14:46

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By johngroganjga
03rd Dec 2016 15:18

Firstly the shareholders don't pay tax on the company's profit. The company pays tax on the company's profit, and the tax it pays is called corporation tax.

The tax the shareholders pay is on income they take out of the company - salaries, benefits in kind, dividends etc. The tax they pay on that income is called income tax.

Entrepreneur's relief only comes into the question when the shareholders do something to result in them paying capital gains tax, which would include selling their shares to someone else or liquidating the company. If certain conditions are met the capital gain will be taxed at 10%. That's entrepreneur's relief - it's just a rate of tax. If the conditions for entrepreneur's relief are not met the gain will be taxed at 20%.

That is all you are going to get from me for free. For the rest you should take advice from the company's accountant, and expect to pay a reasonable fee for the advice.

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By Manchester_man
03rd Dec 2016 15:35

I agree with John

In addition, I woukd say you are clearly well out of your depth here. You have got a lot of basic fundamentals very wrong.

Any company making 800k in profits should be paying for professional advice.

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