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Effective liquidation

28 October 2014
Issue: 4475 / Categories: Forum & Feedback , entrepreneurs relief , Capital Gains

Checking entitlement to entrepreneurs’ relief after trading ceases

My client’s company was incorporated on 20 December 2012 and started trading soon afterwards. The client is the sole director and he owns 100% of the shares. The company’s last contract ended in December 2013 and it has not traded since.

The client has informed me that he wishes to close the company and I need to know whether he qualifies for capital gains tax entrepreneurs’ relief. This will enable me to calculate the costs of choosing the members’ voluntary liquidation route.

To qualify for entrepreneurs’ relief the taxpayer must have met the conditions throughout the year that ends on the date that the business ceased. If members’ voluntary liquidation is to be taken now would this condition have been broken?

Having done some research I believe that he is entitled to entrepreneurs’ relief. However I am a little nervous of this area.

Query 18 476...

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