πŸ“ Tax election letter

About this category

A tax election letter is a document that allows a taxpayer to elect how they would like to be taxed on a particular issue. This could include choosing to be taxed as an individual or an LLC, or electing to file as married filing jointly or separately.

πŸ“ Tax election letter

templates

Section 138A Election Letter (Business Asset Disposal Relief And Earn Outs)

This letter, which should be addressed by the taxpayer to HMRC, contains an irrevocable election to disapply the no-disposal provisions when an earn-out right is received in (part) consideration for shares and the seller wants to include the value of the earn-out claim in the amount on which the seller is claiming business asset disposal relief.

What to watch out for

  • The document should be addressed to HMRC
  • The election is irrevocable
  • The no
  • disposal provisions will be disapplied when an earn
  • out right is received in (part) consideration for shares
  • The value of the earn
  • out claim will be included in the amount on which the seller is claiming business asset disposal relief
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    Associated business activities

    Election to disapply

    The main reason for wanting to disapply the election is to avoid having to pay any capital gains tax on the sale of the property. If the property is sold within two years of the date of the election, any gain made on the sale would be subject to capital gains tax. However, if the property is held for longer than two years, any gain made on the sale would be exempt from capital gains tax. Another reason for wanting to disapply the election is to avoid having to pay stamp duty land tax on the purchase of the property. If the property is purchased within two years of the date of the election, the purchaser would be liable for stamp duty land tax on the purchase price.

    Legal firms who might be able to help

    Note: Although we list lawyers as well as legal firms who may be able to help, this does not indicate that the listed law firms have an affiliation or partnership with Genie AI.

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