Entrepreneurs relief

gravlax

The 10% entrepreneurs relief rate of capital gains tax, does the business owner have to sell their shares / ownership to qualify? Or can they still claim it if they are not selling the business, but just want to stop running a solvent business with no debts (members voluntary liquidation) and pay themselves the cash balance left in the company. How does it work?

Jeremy535897

See https://www.gov.uk/government/publications/entrepreneurs-relief-hs275-self-assessment-helpsheet/hs275-business-asset-disposal-relief-2021

Pennywise

If you mean just stop trading rather than selling the business, then yes, they can.  But if the reserves amount to more than £25k the liquidation has to be done by an insolvency practitioner (whether insolvent or not).  If under £25k, the directors can use the Co House striking off procedure and claim ER on the amount withdrawn.  All subject to the other criteria, i.e. timescales etc.

gravlax

Yes appoint an IP.