What is Entrepreneurs’ Relief [“ER”]?
ER is a personal tax relief claimed by an individual taxpayer and which can considerably reduce the amount of tax paid on a capital gain.
Capital tax reliefs, such as Business Asset Disposal Relief [aka Entrepreneurs Relief], can be applied to all capital distributions made by the Liquidator to shareholders who own 5% or more of the company’s shareholding.
The highest rate of Capital Gains Tax is 20%, but a successful claim to ER results in a 10% tax rate up to the first £1m of chargeable gains.
In order to take advantage of this tax relief, the company needs to go into a solvent liquidation process [Members’ Voluntary Liquidation-MVL] and the Liquidator will make capital distributions to shareholders, thereby enabling them to make the ER claim in their own Tax Returns.
Download our ER Guide for further information.
We aim to ensure that capital distributions are made to shareholders in a timely and efficient manner. In most MVLs, a significant cash distribution is made to members within 24 hours of our appointment.
Insolvency-Online will liaise with the company’s existing accountants to ensure that all outstanding Corporation Tax Returns are submitted. As well as getting the monies out to shareholders as quickly as possible.
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