I own my own trading company. Business asset taper relief means I will only pay 10% on the value of the shares when I sell it. Surely therefore I should be retaining all profits so I only pay 10% tax when I sell?

No. If your company has substantial non-trading activities, it will not be a trading company for taper relief purposes. ('Substantial' refers to 20% of the appropriate measure, which could be profits, turnover or the value of assets.)

If the cash reserves of your company are more than 20% of the value of the company, you may fail the test and the less generous non-business taper relief will kick in. It is vital to ensure that the 20% test is not failed during the period of ownership. Profit extraction techniques may help to extract profit tax efficiently and ensure the taper relief status is not compromised.