Tag: Selling a company
How is selling my limited company taxed?
Sell your shares and you personally pay Capital Gains Tax on the gain: 18% within your basic rate band and 24% above it, after a £3,000 annual allowance. If you qualify for Business Asset Disposal Relief the whole gain up to £1 million is taxed at 18% instead. On a £400,000 gain that is the difference between roughly £71,400 and £94,000 of tax. The company selling its assets instead of you selling your shares is taxed differently, and usually worse. Cited to GOV.UK, checked 20 October 2026.
What is Business Asset Disposal Relief and do I qualify?
Business Asset Disposal Relief taxes qualifying gains at 18% instead of the normal 24%, on up to £1 million of gains over your lifetime. To qualify when selling shares you need a trading company, at least 5% of the ordinary shares and voting rights, and to have been an officer or employee, all for at least 2 years up to the sale. Sole traders and partners selling a business they have owned for 2 years can qualify too. Cited to GOV.UK, checked 20 October 2026.
Should I sell the shares or the assets of my company?
As the seller you will usually prefer selling your shares: one layer of Capital Gains Tax, Business Asset Disposal Relief if you qualify, and a clean break. Buyers often prefer buying the assets, because they pick what they take and leave the company’s history behind. On an asset sale the company pays Corporation Tax on its gains and you are taxed again getting the cash out. Expect the negotiation to be about who bears that difference. Cited to GOV.UK, checked 20 October 2026.