Ask an expert: Transfer of trading operation

David Whiscombe

Question

Our client has wholly owned a small trading company for many years but is encountering difficulty in selling the business. The latest proposal is to sell the trading operation to two senior employees. The land and buildings which are valued at £1m will be retained by the company and leased to a new company initially owned by the client into which the trading operations will be transferred. The trading assets are valued at £350k and goodwill at £150k and it is proposed that the shares in the new company will be sold by the client to the senior employees. Advice regarding any tax pitfalls arising from these transactions would be appreciated. Obviously the client would like to claim entrepreneur’s relief if at all possible ...

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