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.
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.
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