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Kirk Rice Blog

A Case Study – A Successful Parting Of WaysWritten on February 14, 2019 by Kirk Rice LLP

Taxing Times Questions

The Question:

A residential property development company had traded successfully for several years by two separate families. One family decided they wished to exit the company and pursue new ventures whereas the other family wished to continue to trade and expand operations.

Kirk Rice LLP answers:

Kirk Rice restructured the business by way of a share buy-back for the exiting family. The company purchased back the shares using cash reserves which left the family wishing to continue with 100% of the business going forward.

The exiting family received their capital return under favourable capital gains tax rates and by claiming entrepreneur’s relief giving them an effective 10% tax rate on the return.

The remaining family could then continue with the business without having to source funds to buy out the other family.

Kirk Rice act for a range of clients in the property sector including developers, demolition contractors, associated trades, surveyors, architects and estate agents.

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BUSINESS SUCCESSION PLANNING

If you have a business partner and you both want different things, we can help you to work out the best way forward, call 01344 875 000 or email info@kirkrice.co.uk.

Please note: answers are given for general guidance only and specific advice should be taken before acting on any of the suggestions made. The FCA does not regulate tax and trust advice.

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