Selling Ltd and Enterpreneurs' Relief

[northernladuk]

Would this method have any impact on the OP wanting to continue in the same trade for the next two years or does it side step that?

[Lance]

Thanks for the information on PSL.

"tax evaders forum"? I would put that in the "broad, sweeping statement" category i think.

I would say that, in my opinion, almost NOBODY who used the forum where this thread now sits, is a tax "evader".

HMRC wish to paint a picture for the gullible that this is the case, but I'm afraid that it's just not true.

You're right that was a sweeping statement. Fair call.

At risk of going off-topic....... When I started out, and someone tried to sell me a scheme where I pay them between 8 and 12% of my revenue and no tax at all, I called it evasion. No matter how many 'QCs' had given their opinion. Some may well be innocent/naive/duped, but it was and is immoral. I don't everyone's story so yes it was sweeping.

[webberg]

The anti avoidance rules in 2016 have a number of conditions.

One of them is that where the same activity is carried on within 2 years of the event, then the prima facie assumption is that tax avoidance is the "main or one of the main" motives and therefore the terms are in play.

The test is on the individual, not the company.

As you might expect from such mealy mouthed nonsense, HMRC think that every claim for ER is tax avoidance.

Perfect example of Parliament wanting to encourage new businesses, entrepreneurship and growth and HMRC choking off all those good things.

[webberg]

You're right that was a sweeping statement. Fair call.

At risk of going off-topic....... When I started out, and someone tried to sell me a scheme where I pay them between 8 and 12% of my revenue and no tax at all, I called it evasion. No matter how many 'QCs' had given their opinion. Some may well be innocent/naive/duped, but it was and is immoral. I don't everyone's story so yes it was sweeping.

Immoral? Probably.

Illegal? Not at the time and still not.

As I have just demonstrated however by asking about PSL, years of experience in one area does not make more than an innocent abroad in another.

[georgeg]

Hi,

Of course the right professionals will get involved on this. All I was after was a shortcut in my research.

Thanknyou all for your input.

Regards,
G.

[northernladyuk]

Thanks for the information on PSL.

"tax evaders forum"? I would put that in the "broad, sweeping statement" category i think.

I would say that, in my opinion, almost NOBODY who used the forum where this thread now sits, is a tax "evader".

HMRC wish to paint a picture for the gullible that this is the case, but I'm afraid that it's just not true.

Quite so. The money was just resting in my account as part of a routine loan transaction from an offshore film industry investment vehicle that just happened to be denominated in a fast depreciating foreign currency.

[webberg]

Quite so. The money was just resting in my account as part of a routine loan transaction from an offshore film industry investment vehicle that just happened to be denominated in a fast depreciating foreign currency.

If only you knew some of the dross out there masquerading as "tax planning".

One scheme said that they were making a documentary based on film from camera's worn by Russian soldiers in the second war. This would be an epic and woudl lead to book deals, spin off documentaries, PhD's, etc.

Your role was to review footage and note when certain events happened and report back.

You bought your bit of film to review for say 5, borrowed 95 which went to the production company, claimed a loss on 100 = 40 of tax relief.

I've never seen the film advertised. I've never seen a successful tax relief claim on this. I've never seen a tax case on it. I suspect that the investors were persuaded not to make a claim?

In comparison to some schemes, contractors were in the cheap seats.

[TonyF]

Hi Lance,

Sure thing. That would be the cherry on top.
I would not sell for less than what's in the bank... why would I do so anyway? Heh.

Cheers,
G.

If you are selling for a genuine reason, then there should be nothing to prevent you from claiming ER. As I understand it, because you are selling the company and not closing it down, then the two year rule around coming back into the same business wouldnt apply - you aren't liquidating the company, you are selling it which would come under different rules.

You might need to read up on GAAR but from what youve posted here it doesnt' sound like you are avoiding anything and so GAAR might not come into it.

Good luck with the sale, have a break and then come back

[arby]

My company wasn't trading for some 18 months a while back and I was approached with something similar. I was offered 90p to the pound for the cash that I had in the bank (corporation tax had been paid). As I saw it the pluses and minuses were as follows:

pluses:
I could cash out without having to go through MVL and the associated expenses and delays
I wouldn't fall foul of anti-phoenixing regs if I chose to open a new LTD company doing the same thing within 2 years

minuses:
as I was selling my company for 90% of its real value HMRC might see that as the loophole exploitation that it actually is
I would receive perhaps a net of perhaps 5% less than if I went down the MVL route

what's in it for the buyer? As they were/are a large accountancy company they could surely do something clever and retain most of the 10% in value. Do that enough times with enough companies and it's a nice little earner.

[nucastle]

On a 'PSL' as a (presumably) one man band Ltd company? So you leave, and the new owners are magically at the front of the queue for who/what exactly?

Sounds very fishy, and more like something that is used by one of the scheme providers in the sub forum this was originally posted in as a means of tax avoidance. Remember there are a number of unscrupulous companies using this model right now, so you couldn't have timed this more badly, with exactly the same line of reasoning as they are using to promote it.

If it looks like a duck, and quacks like a duck .....