Your calculation
- Sale proceeds gaining EOT relief
- Sale proceeds taxable at
- Tax payable
- Tax payable by
Comparison with non-EOT sale
- would qualify for BADR, and would be taxed at , leaving tax payable.
- would not qualify for BADR, and would be taxed at , leaving tax payable.
- The total tax payable on a non-EOT sale would be .
- Tax saved by selling to an EOT
Complete the form and click “Calculate” to view your results.
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Payment timing
The normal due date of Capital Gains Tax on an EOT sale will be no different to any other type of business sale. It will be 31 January following the tax year of sale. This gives you anywhere from ~10 months to ~22 months between the EOT sale completion date and the CGT payment due date.
Whilst that may sound like plenty of time, EOT sales often have prolonged payment terms, running to 5+ years. Depending on those terms, this may mean you have to pay CGT, albeit at a modest rate, before you've received too much of the sales proceeds.
There is an option (via section 280 of the Taxation of Chargeable Gains Act 1992) whereby if the sales proceeds themselves are payable over a period exceeding 18 months, the CGT can be paid in instalments too. However, be aware that:
- This requires an application, rather than being a default right.
- CGT instalments would be at 50% of the sales proceeds, so still fairly front loaded given the actual CGT liability should be ~12%.
- Our role is to advise the company itself; we cannot get involved in the personal tax affairs of founders and vendors. This page is for general information only. You would need to speak to your accountant about your personal tax affairs.
CGT calculation assumptions and simplifications
- Annual exemption ignored, as it's often trivial relative to gains.
- Base cost ignored, as again it's often trivial relative to gains.
- For ease, either full £1million BADR deemed available or none at all.
- Possibility of some (non-BADR) gains being in basic rate ignored, as again will be trivial.