Entrepreneurs Relief

29 - 10 - 2010

Building up to Entrepreneurs Relief.


Most owners of small incorporated businesses probably regard Entrepreneurs Relief and its recent extension as an irrelevance believing that they will never sell their business. However, if an owner manager is keen to build the strength of his business by retaining cash and assets then this CGT relief may not be irrelevant

Whenever the business is closed down perhaps on retirement then on the winding up the net cash and assets will be paid to the owner manager. This payment is subject to CGT and therefore Entrepreneurs Relief - 10% tax on the first £5 million of life time gains – not to mention the possibility of no tax on the first £10,100 of the gain. The alternative is a large dividend which would attract Income Tax at up to 50% plus National Insurance. Of course Corporation Tax has been paid along the way but it is still a winning formula especially if it is worked alongside pension payments and modest dividends year by year.


This could be a good time for some long term planning advice. Contact us






Foremans LLP Umberlla
Foremans LLP