Entrepreneurs will or have to sell their start up due to many reasons and irrespective of what the reason may be entrepreneurs may gain benefits by selling their business at a reduced tax rate.
This benefit in the UK is called entrepreneurs’ relief and under this scheme entrepreneurs may sell or even give away their business and claim entrepreneurs’ relief for up to £10m the lifetime gains and be taxed at a reduced rate of 10% and is available to sole traders, partners, company directors and employees who have 5% or more shareholding.
The need of entrepreneurs’ relief was felt long before when many entrepreneurs started to feel the need to sell their business or give away their business. There are many entrepreneurs who wish to sell whole or a part of their company and gain maximum benefit from it.
There are requirements that need to be taken care of to gain maximum benefit from entrepreneurs’ relief.
- All requirements for entrepreneurs relief must be met for at least 24 months at all times
- The current limit is £10m per person.