Cgt

barney1970

In May this year received monies from my company, due to investment in the company by a 3rd party. I'd owned approx 2.0% of the ordinary company shares, and shares in the company EMI Scheme. I received approx £381k. Am I right in assumming I owe CGT tax at 28%, or is there anyway that I can reduce this tax bill?

pjclar02

Hello there

So to confirm the situation, you owned 2% of the shares in a private limited company, which also was your employer. The shares were acquired through an EMI scheme.

The shares in that company were sold and your proceeds were £381k.

To calculate your capital gains tax liability you deduct from the proceeds the original cost of the EMI option, any incidental costs you incurred when selling the shares and the annual exempt amount for the year of sale - currently £10,600.

The resultant taxable gain will be taxed at either 18% or 28% or a combination. If you are a higher rate taxpayer you will pay at 28%.

If you own less than 5% of the shares your options are fairly limited as you cannot claim Entrepreneur's Relief or Rollover Relief and therefore there is little you can do by way of tax mitigation.