Tax on selling an offshore company

Anyone contemplating selling shares in an offshore company would need to consider both the standard Capital Gains Tax rules that apply when any asset is sold as well as the specific anti avoidance legislation that can apply to overseas assets. A capital gain will arise on the disposal of the shares and after 6 April 2008 this will be at a flat 18% rate of CGT with no taper relief or indexation allowance. The annual exemption could still be deducted. Entrepreneurs relief could be due though to subject part or all of the gain to less an effective 10% rate of CGT. If you were Non UK resident you'd be exempt from CGT, subject to the five year requirement. If you were non UK domiciled (but UK resident) you could avoid UK CGT by retaining the proceeds overseas. However this will only apply after 6 April 2008 if you've either been UK resident for less than 8 tax years or if you pay a £30,000 tax charge to the Revenue. If an asset deal was planned, the company itself may be exempt from tax on the gain if it is non UK resident. There are though anti avoidance rules to attribute gains to UK resident and domiciled shareholders. After April 2008 non doms are also subject to the remittance basis in respect of the offshore capital gain (where they claim the remittance basis).