Part A Tom Jones, aged 60, has been running his business for many years. He has decided to take early retirement. His daughter, Sonya, has been working in the business for the last 5 years. Tom would like to transfer the business to Sonya. Alternatively, a local businessman has made an offer to buy the business for 850,000. REQUIRED: (a) Advise Tom of any capital gains tax liability that he might have (i) on the transfer of the business to his daughter (ii) on the sale of the business to the local businessman. (b) Recommend which course of action he should take in order to minimise his tax liabilities.
Part A
Tom Jones, aged 60, has been running his business for many years. He has decided to take early retirement. His daughter, Sonya, has been working in the business for the last 5 years. Tom would like to transfer the business to Sonya.
Alternatively, a local businessman has made an offer to buy the business for 850,000.
REQUIRED:
(a) Advise Tom of any
(i) on the transfer of the business to his daughter
(ii) on the sale of the business to the local businessman.
(b) Recommend which course of action he should take in order to minimise his tax liabilities.
Part B
Sonya has always wanted to travel. She is considering moving to Australia in 2023. She has agreed with her father Tom to take over the business now. Before she leaves she hopes to sell the business to help fund her move to Australia.
REQUIRED:
Advise Sonya of the capital gains tax liability she would have if she sells the business in 2023.
Part C
Tom’s son, Daniel, who moved to the US many years ago, returned to Ireland in 2018. At that time (2018) Tom gave Daniel a site of half an acre. Daniel had intended to build a house for himself on the site and had received planning permission to build a two storey house on the site.
Due to financial difficulties Daniel never built the house. He has now decided to return to the US and intends to sell the site before he leaves.
REQUIRED:
Advise Daniel on the tax implications of selling the site.
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