Ken Moody ruminates on recent experiences of trying to work out whether capital gains tax on a private company sale could be paid by instalments.
I was recently asked about the payment of capital gains tax (CGT) by instalments following a management buyout of a private company involving deferred consideration payable by monthly instalments. I have to say that whenever I have considered this question, I have ‘drawn a blank’ for one reason or another!
The legislation (at TCGA 1992, s 280) provides that where the consideration, or part of the consideration, for a CGT disposal is payable by instalments over a period of more than 18 months, the seller may opt to pay the CGT by such instalments ‘as the Board may allow’ over a period of up to eight years. The rationale behind the legislation is unobjectionable, i.e., to provide some respite where the CGT will become payable before the seller has received
