Goodier Smith and Watts

Devonshire House
Manor Way, Borehamwood
Hertfordshire, WD6 1QQ

Search News


Claiming Entrepreneurs’ Relief when selling your business

Source: HM Revenue & Customs | | 25/06/2019

Entrepreneurs' Relief (ER) can be a valuable relief when selling your business, your shares in a trading company or your interest in a trading partnership. Where ER is available Capital Gains Tax (CGT) of 10% is payable in place of the standard rate. CGT on the disposal of chargeable assets is usually chargeable at 20%. There are a number of qualifying conditions that must be met in order to qualify for Entrepreneurs' Relief.

There is a lifetime limit that means that you can qualify for ER more than once, subject to an overriding total limit of £10m of qualifying capital gains. There are time limits that must be met to make a claim. To qualify for relief you should be either an officer or employee of the company and own at least 5% of the company and have at least 5% of the voting rights. There are also other qualifying conditions that must be met in order to qualify for the relief.

In a recent change, the minimum period during which certain conditions must be met in order to qualify for ER increased from one to two years (from 6 April 2019). If you are looking to sell your business, you need to be mindful of meeting all the necessary conditions in order to qualify for ER.

There is also a sister relief called Investor’s relief which has a separate £10 million lifetime cap. This is useful for investors who do not meet the officer or employee requirement for ER.



 

Latest News

What you can do with your pension pot
13/08/2019 - More...
Pension Wise is a free government service that was launched in 2015 to help provide individuals with general pension

When you can claim back VAT on purchase of a car
13/08/2019 - More...
There are complex VAT rules that determine the amount of VAT that can be recovered when purchasing a new car. The usual

Child Benefit charge if income exceeds £50,000
13/08/2019 - More...
The High Income Child Benefit charge (HICBC) applies to a parent whose income exceeds £50,000 in a tax year and

Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

 

 

ICAEW-BLK RGB  

 

Save

Save

Copyright © 2019 - Goodier, Smith and Watts

Cookie Policy | Website Privacy Policy                                                                                                                                                                                                                                                         

Registered in England under the number 3724657