20 Sep Tax Tip: Succession Planning
Tax Tip: Arrange for your company to buy your shares to help solve your business succession planning problem.
On retirement, you may want your younger colleagues to make you a cash offer for your shares. However, they may not have sufficient cash resources to do so. One solution is for the company itself to buy your shares and then cancel them. This leaves the remaining shareholders controlling the company. You end up with cash, and up to £10 million of the gain should be taxed at no more than 10% – assuming your disposal qualifies for entrepreneurs’ relief.
Tax tip supplied by Tax Briefs. Your tax situation will depend on your personal circumstances and we recommend you obtain independent tax advice. Any tax information is based on our understanding of current and proposed legislation and practice. The legislation and practice may be subject to change.