Advise on share buyback/Capital Gain

[gadgetfr34k]

Hi,

Kindly please advise on this/ or any other efficient ways of extracing money out of business account.

Thanks

[Nixon Williams]

A quick thought may be for you to both close the existing company and for you to open a new company for your continued contracting.

You would both probably qualify for Entrepreneur's Relief but at this stage you would probably have to go for a formal winding up, it all depends upon the cash involved.

Have a chat with your accountant and see what they suggest, but the above will be effective and realitively straight forward.

Alan

[je vais a la plage]

Hi,

Was thinking about this recently as well. For me, it's more about capital release (so selling x number of shares back to the company to make full use of my capital gains tax allowance) rather than closing the company. Not sure if anyone has done this / has any advice?

[Old Greg]

Hi,

Was thinking about this recently as well. For me, it's more about capital release (so selling x number of shares back to the company to make full use of my capital gains tax allowance) rather than closing the company. Not sure if anyone has done this / has any advice?

First piece of advice is not to open an 8 year old thread.

[Lance]

Hi,

Was thinking about this recently as well. For me, it's more about capital release (so selling x number of shares back to the company to make full use of my capital gains tax allowance) rather than closing the company. Not sure if anyone has done this / has any advice?

Just thinking this through...

Let’s say you have 10 shares, that cost you £10.
Now the company has £100k on the balance sheet so your ten shares are worth £100k.

If the company buys back 5 shares for £50k then you pay CGT on the gain.
Great

Your company owns half of itself. Those shares are now an asset on the balance sheet.
When you declare a dividend the company gets 50% of that????? Maybe. I dunno.

Have you asked an accountant?

I know the details are here though so you can read up on it.

The Companies Act 2006 (Amendment of Part 18) Regulations 2013


Thing is.......if this wheeze saves tax then why is nobody else doing it?

[je vais a la plage]

Thing is.......if this wheeze saves tax then why is nobody else doing it?

Ah! Here's why:

Condition A: The purchase must be made wholly or mainly for the purpose of benefiting the trade
carried on by the company and not form part of a scheme or arrangement where the main purpose
or one of the main purposes is to enable the seller to participate in the profits of the company
without receiving a dividend or the avoidance of tax. Certain conditions set out in sections
10341043 CTA 2010 should also be satisfied; the flowcharts in this guidance give further details of
these conditions.