
1. Entrepreneurs’ relief
As everyone seems to know, this is the tax relief that enables you to sell your company and only pay ten per cent tax! Although this is true, these high expectations are not always realised. The stumbling block here is that Entrepreneurs’ Relief comes with some strictly applied tests, and it’s easy to fall the wrong side of the line. Passing shares to non-working spouses, or holding non-voting shares, are just a few of the problems that can arise and can’t easily be undone at the 11th hour. A review of the qualifying conditions would be worth putting on your New Year’s resolution list.2. Business Property Relief (BPR)
3. EIS and SEIS reliefs
Designed to help SMEs attract external investment, the Enterprise Investment Scheme (‘EIS’) and Seed Enterprise Investment Scheme (‘SEIS’) offer income tax and capital gains tax reliefs to equity investors in qualifying companies. EIS income tax relief is currently set at 30 per cent on investments up to £1m, and SEIS at 50 per cent on investments up to £100,000. Potentially of even more value to the investor, tax free capital gains are available after the shares have been held for three years.4. Enterprise Management Incentive (EMI) tax reliefs
5. Holdover and rollover reliefs
Tried and tested over time, holdover and rollover reliefs provide for the postponement of tax on the disposal of qualifying business assets. Not immediately obvious, these reliefs can easily be missed and forgotten. Rollover relief may apply if you reinvest sales proceeds into replacement business assets, and holdover relief may apply if you gift business assets, including shares in unquoted trading companies. These reliefs are of particular use at times of change for the company or its shareholders.6. Research and Development (R&D) relief
Heavily favoured by government, R&D relief is the sparkles among its peers. Continually improved and updated, the ability for SMEs to now obtain a 225 per cent tax deduction for qualifying R&D expenditure, or to obtain cash repayments from HMRC, has meant this relief is finally getting the attention it deserves. It’s not all about conducting experiments in white lab coats, as more and more SMEs have found that even seemingly unrelated parts of what they do fall under the qualifying definition of R&D. It’s certainly worthwhile taking a closer look at this relief to see if you could also qualify. Image sourceShare this story
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