From: Jon Griffey 
Newsgroups: uk.finance
Subject: Re: CGT mitigation query!
Date: Tue, 10 May 2005 18:02:30 +0100

In article , Dave P 
<7f39vxm02@sneakemail.com> writes
>If I obtain shares in a brand new, non-listed, start-up company, total value
>£200; then after 12 months trading I can sell these shares for, say,
>£30,000; is there any way of mitigating the CGT hit by doing something
>clever with the shares at the outset?  I'm thinking along the lines of
>putting them into an ISA wrapper or something (but I know isn't possible
>because the company isn't listed).
>
>Please don't tell me that I need to consult an accountant about this; I did,
>and he came up with nothing.  However, he's just screwed up by failing to
>advise me on another matter, and I'd like to know whether he's definitely
>got this one right.  In actual fact, it's too late to do anything 'at the
>outset' anyway since I'm about to sell the shares (and will be paying CGT);
>but I want to know if I need to change my accountant!
>
>Dave
>
>

 From what you say I suspect that it 'may' qualify for business asset 
taper relief (BATR)

If so and you have held the shares for a year then you should be 
entitled to 50% taper relief.

With transferring some to the spouse and two lots of annual exemption as 
well might this wipe out the gain altogether?  You will need to go 
through the computations carefully.

As to clever things that could have been done initially, conceivably the 
shares could have been acquired by a pension fund and thus the gain 
would be CGT free, although the annuity would ultimately be taxed.

-- 
Jon Griffey FCCA CTA
Hackett Griffey
Chartered Certified Accountants & Registered Auditors
2 Mill Road, Haverhill, Suffolk, CB9 8BD

Tel (01440) 762024

www.hackettgriffey.com

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