Commentary

23.6 Possible double taxation of company gains

BUSINESSES vol 4(2) start-up, sale and purchase
| Commentary

23.6 Possible double taxation of company gains

| Commentary

23.6 Possible double taxation of company gains

One major disadvantage of the tax treatment of shareholder proprietors is the possible ‘double taxation’ of company gains. If a company realises a capital gain, corporation tax will be charged on that gain in the usual way. However, the net gain after deducting corporation tax will, in most cases, have the effect of increasing the value of the company’s shares. When a shareholder disposes of his shares, this increase will presumably increase the amount of any gain, and consequently the potential capital gains tax payable on that disposal. Thus, the gain is subject

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