Expert in Business Incorporation Relief
A business owner or business partner will be automatically eligible for Incorporation relief and don’t have to claim it. To compute the payable Capital Gains Tax, deduct the gain, made by selling the business, from the market value of shares received. Let’s understand this by an example; a business owner or partner transfers the business in return of shares worth £100,000 and the profit made is £60,000. If the shares are sold later, their cost for computation of Capital gains tax will be £40,000 (£100,000 – £60,000).
To qualify for Incorporation relief the two most important conditions are:
- To be in a business partnership or operate as a sole trader
- To transfer the business and all the /assets, apart from cash, in return for shares in a company