Tax liable on selling shares in my company

huwy123

Hi,

I'm looking at selling some of my shareholding in a company I work for. I was wondering what tax I may be liable, and ways of reducing my liability. I currently own 25% of the company and are looking to sell 10% for 25k. Any help greatly appreciated.

-H

macca64

Taper relief will reduce the taxable gain, are they a business asset? How long have you held the shares? What is your original cost?

If they are a business asset and you have held them for over 2/3 years your taxable gain will only be 25%.

Your best bet is to speak to a specialist (which I am not). If you post more details, and I can reply in more detail.

huwy123

Thanks for the super-fast response.

Sorry but I'm not sure what you mean by are they a "business asset". There was no original cost - I was one of the people who started the company approx. 5 years ago.

As you can probably tell I'm not experienced in this sort of thing!

macca64

I would guess as you started the company then they would be classed as a business asset, and as you have held them for 5 years then the taxable gain is only 25%.

So of your £25,000 proceeds only £6,250 is taxable, and that amount will be covered by your annual CGT allowance, which I beleive is £9,200 for 07/08.

HTH.

huwy123

So if only £6,250 is taxable and my annual CGT allowance is £9,200 - does that mean I won't have to pay any tax??

macca64

Correct. Although to be honest, don't just take my word for it, please get professional advice, as I am by no means a tax expert.

huwy123

Thanks a lot for your help!