Entrepreneurs Relief

Accessing and Maximising Entrepreneurs Relief On A Company Sale

Accessing and Maximising Entrepreneurs Relief On A Company Sale

It is often on a disposal of a business where tax considerations can have a considerable impact and with good planning, business owners can achieve a tax efficient exit. Entrepreneurs relief (“ER”) is often the key consideration for shareholders in achieving such a tax efficient exit and this article summarises some of the common tax issues and opportunities that business owners should consider in preparing for an exit. Entrepreneurs relief – what is it? ER provides for a 10% rate of capital gains tax on qualifying disposals up to a lifetime limit of £10m. This is clearly an attractive rate of tax for UK resident individuals and ensuring that this relief can be utilised as well as maximising use of the lifetime limit are key considerations to business owners on an exit. Accessing entrepren... »

Entrepreneurs Aged Over 60 Urged to Plan Exit Strategies

Entrepreneurs Aged Over 60 Urged to Plan Exit Strategies

With a third of UK business directors now aged 60 or over, Moore Stephens has issued a report urging older entrepreneurs to plan their exit strategy. Surveying 403,000 directors on the boards of 83,000 small enterprises, the accounting and advisory firm found that the average age of small enterprise directors today is 54 – suggesting that many will need to consider retirement plans in the near future. The report flagged that there is a misconception among business owners when it comes to exiting; many business directors said that they estimated it would only take a few months to get their company ready for a trade sale, when in fact it could take years. Moore Stephens has advised business owners to set up a trust well in advance of retirement, as well as looking at potential tax reliefs su... »

Entrepreneurs’ Relief

Capital Gains Tax (CGT) is chargeable on the proceeds received for the disposal of chargeable capital assets by UK residents. For tax year 2012/13, a basic rate taxpayer will suffer CGT at 18%, and for an individual with taxable income or gains over £34,370 (and so subject to higher or additional rates of income tax) the CGT rate is 28%. However, Entrepreneurs’ Relief (ER) reduces the rate of capital gains tax payable on disposals of “qualifying business assets” down to 10%. This relief can apply to the first £10 million of qualifying gains that an individual realizes in his or her lifetime, and because the top rate of CGT that would otherwise be paid is 28%, ER can currently give a total potential tax saving of £1.8 million. ER is a very important relief for ... »

Taper Relief

In April 2008 Taper Relief was replaced by Entrepreneurs Relief. This business advice article exists purely for reference purposes. Taper Relief was introduced in 1998 to replace indexation and to encourage long-term investment. Taper Relief was extended dramatically throughout its ten years until it was replaced by Entrepreneurs’ Relief in 2008. Taper Relief was useful for the disposal of assets, particularly those with qualifying business use, and provided a valuable reduction on the amount of Capital Gains Tax payable. Two years after Taper Relief was introduced the Finance Act 2000 extended the definition of a business asset, making the Capital Gains Tax rate applicable to even more taxpayers. The Finance Act 2002 then reduced the minimum holding period, making taper relief appli... »