“I was so pleased I talked to Watsons before I proceeded with the sale of my business. I had no idea that the way the deal was structured could have such an effect on the Capital Gains Tax liability. They literally saved me thousands of pounds!”
- Diana Brown, owner
The client received an offer in excess of £1 million for her business’s goodwill, assets and fixtures.
As the business was carried on through a limited company, any gain would be chargeable to the limited company at 30%, whereas a sale of the company’s shares would limit the tax liability to 10%.
The vendor was reluctant to purchase the shares so we negotiated a reduction in the selling price which ensured the sale was structured in the most tax-efficient way.
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By reducing the sale price by £200,000 and obtaining a sale of shares we were able to reduce our client’s tax liability by £260,000, thus increasing her net proceeds by £60,000 and avoiding the issue of double taxation.