With the sale of Dairy Crest to Saputo in April, Dairy Crest shareholders should have now received the proceeds from the sale of their shareholding. While the funds are no doubt welcome for some, there will be tax implications for the future. For some farmers who owned Dairy Crest shares, they were generally acquired back in 1996 after Milk Marque disbanded. There may have been a cost associated with the share transfer at this point, so if you have any documents relating to this, they would be worth looking up, as this could save tax.
So how much tax is payable?
The sale of the shares will be subject to Capital Gains Tax (CGT), and as the sale was after 5 April 2019, any tax payable will be due on 31 January 2021, some 21 months away. This must be borne in mind when considering the usage of the funds received now.
Depending on the actual ownership of the shares and the individual circumstances of the tax payer, it is difficult to put a tax percentage on this. Each individual tax payer will have an annual CGT exemption of £12,000, which will lessen any CGT payable, however, if the shares are owned by a company, the tax payable would also be different.
If you have received share sale proceeds, it would be prudent to consider the tax position now, rather than receive a larger that normal tax bill in January 2021. There may be options available to lessen any CGT, so planning for this now may be beneficial.
If you want to know more, contact us.