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Entrepreneurs Relief and Insolvency

Posted on 3 December 2015

Entrepreneurs Relief which is a scheme available to directors who own 5% or more of a company and entitles them to a reduced, 10% tax rate on capital gains up to a lifetime limit of £10m. The relief could save entrepreneurs up to £1.8m of capital gains tax on disposal of £10m shares.

Ahead of the Autumn Statement there had been concerns that Entrepreneurs Relief was set to be scrapped.

What is the relevance of this to insolvency? Well, if you are director looking to restructure a group of companies or perhaps looking to retire then winding your company up through a Members Voluntary Liquidation (MVL) would enable the capital extracted to be subject to Capital Gains Tax (28%) rather than the higher level Income Tax. On top of this saving you may be eligible to Entrepreneurs Relief and the much more attractive 10% rate of tax.  

To find out how this could work for you contact our Insolvency Practitioner at our Bristol Office alisonbyrne@byrneassociates.co.uk. 

 

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It is important to take early advice - whilst all options are still open. The longer matters are left, the less control you will have over the outcome, and the harder it becomes to save a business

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