[Question] Reducing Share Sale Capital Gains from Past Salary Sacrifice

[davidbann]

Hi there,

I am in the process of selling shares in my consulting business. It was started with zero capital. Over the years there have been periods where I did not take a salary so that I could continue to pay employee salaries. This was never recorded as a loan or anything else in the books. Now that I am selling shares in the business, is it an option to claim the value of the sacrificed salary payments from the past (many years back) in order to reduce the capital gain? Or is to too late and after-the-fact?

Thanks
David

[Dave A]

Do you really want to pay income tax instead of capital gains tax?

[Francois_za]

As Dave mentioned, you will have to declare that income on salary in the year of assessment in comparison to capital gains tax which is at 80% and has an annual exclusion amount, the better option would be CGT from a tax perspective.

[davidbann]

Oh ok I never considered the fact that I would have to pay income tax on the sacrificed salary if I go that route... What you have said makes sense - thanks for the advice!