Entrepreneur Relief - Do I qualify as a director of LTD company

F

FewEuro

Registered User
Messages
29
Hi.

I have a LTD company (approx 14 years), I'm the only Director with 100% shares.
I've worked in the company, been on the payroll, and its been my sole source of income for the past 10/12 years.
I currently have two shops as part of this company and I'm considering selling one on (approx 250k). If I was to do that would you think that I would avail of the Entrepreneurs relief of 10% regarding CGT?

Does this relief only apply to sole traders? Someone has suggested that because the stores are part of the company, full CGT of 33% applies.
Is this correct?
 
Entrepreneur relief applies to directors, such as yourself, who sell their shares. However it applies to the sale of the shares. If the company owns the two shops then it will be liable to CGT on any gain on sale. You will either need to liquidate or sell your shares (or some of them) company in order to realise the gain. Entrepreneur relief is for the individual and not the company. Under Irish tax rules it is very difficult to sale an asset in a company and get the proceeds to the shareholder in a tax efficient without a third party sale of the/some of shares or a liquidation (members voluntary liquidation - a solvent liquidation in other words).
 
Thank you for your reply. I understand what you're saying regarding the shops belonging to the company. Would it be possible to move the operation of the remaining store to a new company and then sell the existing company i.e all the shares in existingco?
 
I’m just asking whether entrepreneur relief would apply for me, if the company is sold and all it owns, ie all shares were sold and of the company

Hardly a mess Brendan. I’m just asking for some advice from people who know more than me about the topic or who have been down this road before. I’m a small business owner with a couple of stores, nothing big time I’m sure there are plenty of others like me who don’t have a team of tax advisors at hand. Surely that’s the idea of having a forum to ask/discuss?
 
Sorry FE

I didn't mean to come across as saying go elsewhere and not to be asking here.

I was trying to point out that there must have been a decision some years ago for the company to buy the property in its name. I would revisit that decision and see what the logic was at the time.

But it is a mess. A company should not own property and it's very difficult to dispose of it without being hit for a double hit of CGT.

Brendan
 
No problem Brendan I understand.

Maybe I should have been more specific regarding the assets in question. There is no property owned, shop premises are leased.
I have two stores, franchise businesses in fact in 2 different locations. I started with 1
In my Ltd company and then after a couple of years added a second. Premises are leased. I’m considering selling 1 of them.
What I’m selling really is the goodwill
Stores have built up well over time.

It looks like if I sell one franchise location CGT at 33% applies because the company owns it.
What I’m wondering now is if I sold the company as a whole would I then qualify for entrepreneurs relief and CGT at 10%.
 
You must log in or register to reply here.
Back
Top