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Equity is a term that refers to the amount of money the asset owner would receive if they were to sell the asset and pay off any outstanding liabilities.

More detail:

In finance, Equity is equal to all assets minus all liabilities. So, if a company was to liquidate all its assets, the total value left after paying off all liabilities is equal to the value of equity. When you purchase shares in a Limited Company, you are purchasing equity in the company.

Shareholder equity can be calculated by taking the total assets and subtracting the total liabilities. This information should be available on a business's balance sheet for the year.

If you own Equity in a Limited Company, you may have to pay Dividend tax if you receive more dividends than your tax-free allowance. You may also have to pay Capital Gains tax if you sell the Equity for a profit in the future.

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