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Selling a Business and Reducing Capital Gains

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  • 01-04-2016 2:58pm
    #1
    jacksn
    Registered Users Posts: 118 ✭✭


    ** Note: The below is an example, not a real life situation. I'm not an accountant or a lawyer so I don't know the ins and outs of selling a business and the below is purely an example"

    ---

    If someone wanted to offer X amount for your business, you have €1000 in assets and the rest goodwill (name, brand, existing contracts, etc), say they offer €30,000

    With Capital Gains Tax at 33%, Could you sell the business for €1, transfer all assets and IP to the new owner and then invoice them €29,000 as consultant fees?, you would have vat at 23% included but save 10% from capital gains?

    this is just a barstool thought..

    Thanks


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    #2
    Gloomtastic!
    Registered Users Posts: 8,480 ✭✭✭Gloomtastic!


    jacksn wrote: »
    ** Note: The below is an example, not a real life situation. I'm not an accountant or a lawyer so I don't know the ins and outs of selling a business and the below is purely an example"

    ---

    If someone wanted to offer X amount for your business, you have €1000 in assets and the rest goodwill (name, brand, existing contracts, etc), say they offer €30,000

    With Capital Gains Tax at 33%, Could you sell the business for €1, transfer all assets and IP to the new owner and then invoice them €29,000 as consultant fees?, you would have vat at 23% included but save 10% from capital gains?

    this is just a barstool thought..

    Thanks

    And the year-end tax for the Consultant Fees?


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    #3
    Lockedout2
    Registered Users Posts: 402 ✭✭Lockedout2


    jacksn wrote: »
    ** Note: The below is an example, not a real life situation. I'm not an accountant or a lawyer so I don't know the ins and outs of selling a business and the below is purely an example"

    ---

    If someone wanted to offer X amount for your business, you have €1000 in assets and the rest goodwill (name, brand, existing contracts, etc), say they offer €30,000

    With Capital Gains Tax at 33%, Could you sell the business for €1, transfer all assets and IP to the new owner and then invoice them €29,000 as consultant fees?, you would have vat at 23% included but save 10% from capital gains?

    this is just a barstool thought..

    Thanks

    As me learned colleague has enquired what about the income tax PRSI and USC.

    VAT is usually irrelevant as the purchaser can claim it back.


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