Entrepreneurs’ Relief is available on a capital distribution (not exceeding £25,000) received arising on a winding up, which is received no later than three years following the date on which the company ceased to be a trading company, where..
Throughout the one year prior to the date on which the company ceased trading the shareholder was:
a. An officer or employee of the company
b. The Company was his ‘personal company’ (held at least 5% of the shares & voting rights)
c. The company was a trading company or holding company of a trading group.
The company needs to have been trading for at least a full year for its shareholders to obtain ER on a capital distribution made within three years of the date it ceased trading.
Ultimately, Entrepreneurs’ Relief reduces the amount of the Capital Gains Tax (CGT) down to 10% on a disposal of qualifying business assets on or after 6 April 2008. For more information on Entrepreneurs’ Relief, please give our consultants a call on 01707 871622 or request a call back.