Is your company's business a trade, a business or an investment activity? What is the difference? What are the tax issues for the company and its shareholders?
Useful guides on this topic
Badges of Trade: Are you trading or not?
Are you trading, running a business, or just buying and selling investments? Is your 'side-hustle' taxable? The 'Badges of Trade' are a set of indicators, built up over time by the courts, to decide when an activity is a trading or investment activity.
Is it a trade, a business or an investment?
Starting in business? Is your new or existing business a trade, a business or an investment activity? The distinction is very important for tax purposes. This guide summarises key issues for tax purposes.
Surplus Cash: CGT & IHT relief
Does having an excess cash balance affect a company's trading status for CGT or IHT relief? What are the issues for each relief? What evidence is considered when reviewing activities?
Further guides for shareholders
Which investment relief? IR, BADR, SEIS or EIS
What is the difference between Business Asset Disposal Relief (BADR) and Investors' Relief? How do they compare to investments in the Seed Enterprise Investment Scheme (SEIS) and Enterprise Investment Scheme (EIS)?
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