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Business sale

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17 August 2010
Issue: 4268 / Categories: Forum & Feedback
A taxpayer personally owns a property which is used as the trading premises of his limited company. The company’s trade, but not its shares are to be sold to a third party, which will also purchase the property

My client trades as a retail premises through the format of a limited company. He owns the shop premises personally.

A high street chain wishes to buy the operation and will pay him for the property and the company for the rest of the business. It does not wish to buy the shares.

Will my client be entitled to entrepreneurs’ relief?

My concern is that the winding up of the company might take some time and I am wondering whether the associated disposal aspects will be satisfied.

Query 17 651 – Trader

Reply from Thicket

If a trading company disposes of its trade it ceases to be a trading company for the purposes of entrepreneurs’ relief.

However a distribution by a liquidator of such a company will still qualify as a material disposal of business assets (and be eligible for entrepreneurs’ relief) if the distribution is...

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