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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.
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The Churchill Knight blog is regularly updated with helpful content for contractors and freelancers – especially articles that answer the most frequently asked questions about umbrella companies! Please pop back shortly to see the latest articles written by Andrew Trodden (Marketing Manager) and Clare Denison (Marketing Executive).