John Skoulding
Business Shapers
10 September 2014

Tax issues arising out of holding shares

Today, private individuals who hold shares in private trading companies (or the holding company of a trading group) have a number of tax issues to consider when they are thinking about holding the shares, either directly or through personal pension arrangements.  SIPPs (Self Invested Pension Plans) allow shares to be held through personal pension arrangements, but with them comes the  principal concern that holding shares indirectly through a SIPP means that they will not qualify for Entrepreneurs’ Relief on an eventual sale of the company.  This issue is also likely to come into focus if there is a time when the value of assets held within a SIPP reaches the lifetime limit (currently £1.25m).  Consequently, the balance between avoiding excessive charges and possibly obtaining the beneficial 10% rate of tax under Entrepreneurs’ Relief is thrown into focus.

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