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Is entrepreneurs’ relief likely to be at risk if shares are sold over a three-year period?
My client has been offered £75 000 for her 100% shareholding in her company. This will paid to her over three years.
I am wondering whether she could structure this transaction so that she sells 33.3% in 2015/16 33.3% in 2016/17 and the balance in 2017/18. This would enable her to use three years’ annual capital gains tax exemptions.
One potential disadvantage is that on my understanding she will be entitled to capital gains tax entrepreneurs’ relief on a sale of the shares in the company. If she were to structure a sale over three years would this jeopardise such a claim?
I should be grateful for readers’ thoughts on these ideas. I would also welcome any general comments on any potential pitfalls that I might have overlooked.
I look forward to replies.
Query 18 770– Seller
Reply by Chelsea
For cash consideration...
