earthnail
8 months ago
There's a reasonable argument to be made whether you should be subject to capital gains in the first place. I sold my last company in the UK, and honestly the tax burden was so ridiculously low I still feel somewhat bad for it. It's crazy.
There is of course a competition problem with the high taxation in Germany; if your expected returns are much lower than in other countries your risk just increased significantly. We already have a situation where on average it's much, much more lucrative to work at bigcorp instead.
My main gripe with the GmbH though is not the amount of taxation. GmbHs are so needlessly complex it blows my mind (I'm currently running one), but that's on the side of regulations. I'd MUCH prefer if Germany worked on getting rid of silly shit like the notary requirement etc., and if taxation and bookkeeping were simplified, before we talk about lowering taxes.
vincent_s
8 months ago
I'd love to hear more about your UK exit! Most of my knowledge about UK tax rates and processes is theoretical research, so I'd really appreciate hearing a real-world experience. Did you qualify for Business Asset Disposal Relief (the old Entrepreneurs' Relief)? How was the overall process and timeline for you?
petercooper
8 months ago
I was going to say that I'm not sure the article is quite right. While the UK does have BADR for up to £1m, it applies to individuals, not businesses. So if I sell the shares in my company or liquidate my company, I can use it. But if the business does an asset sale, there's another step: the company selling the assets. And that company has to pay its own taxes first.
If my British company sold its assets for £1m, it needs to pay 25% Corporation Tax on that. Then I could liquidate the company with its £750k remaining cash and pay 10% on that (for now, it's going up to 14% in April). This results in a total 32.5% tax, not 10%. Above £1m, it'll be even more as there's no more BADR (so roughly 40% tax total on the £1m+ chunk).