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Saving Tax Following Sale of our Business

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Perhaps you have sold a business within the last three years. Or maybe you are going through that process now?

The obvious tax consequence is the exposure to Capital Gains Tax liability on the sale. A less obvious consequence is that your potential Inheritance Tax liability could rise sharply; an asset, your business, qualifying for relief from IHT is being converted into an asset class, cash, with no such reliefs. The proceeds of sale will fall into the tax net.

Fortunately, these consequences can be mitigated or avoided.

Investment in an Enterprise Investment Scheme would :

-Allow the capital gains tax to be deferred ;

-Give the benefit of future tax free gains;

-Attract 30% income tax relief on the amount invested ;

-Retain the benefit of Business Property Relief to limit exposure to IHT.

 

Why not speak to us about how you could make some tax savings both for yourself and for your family?

Call us at: SWLaw Investment  & Financial Planning Ltd  01752 205205

The minimum investment period is 3 years for EIS.

 

Summary of tax reliefs :

EIS

Tax relief of 30% on initial investment (up to £1M)
No tax on gains
Deferral of a Capital Gains Tax liability where gain is reinvested in EIS
Reduce Inheritance Tax exposure – qualifies for Business Property Relief after 2 years

 

References

The Enterprise Investment Scheme Association

HMRC Overview of reliefs on EIS investment

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