Business asset disposal relief (BADR; previously known as entrepreneurs’ relief (ER)) is a valuable and much sought-after capital gains tax relief. However, the conditions for claiming the relief are often problematic. Jumping hurdles For an individual shareholder disposing of shares in a company, the most common condition for relief is that throughout a two-year period… Read More »
Many company owners hope to claim business asset disposal relief (BADR) (formerly known as entrepreneurs’ relief) on an eventual sale of their shares, to benefit from the special capital gains tax rate of only 10%. The small print In most cases, the BADR provisions on a share disposal require that certain conditions are satisfied for… Read More »
Most trading company owners wishing to claim capital gains tax business asset disposal relief (BADR) (formerly known as entrepreneurs’ relief (ER)) on an eventual sale of their shares need to satisfy certain conditions throughout a two-year period ending with the disposal. Make it ‘personal’ One of those conditions is that the company is the individual’s… Read More »
A targeted anti-avoidance rule (TAAR) was introduced (from 6 April 2016) to prevent ‘phoenixism’. In broad terms, this practice involves company owners winding up their ‘old’ companies and extracting profit reserves as capital (instead of income) and repeating the exercise in one or more successive businesses. The effect of the TAAR applying is that an… Read More »
A tightening of conditions for capital gains tax (CGT) entrepreneurs’ relief (ER) in Finance Act 2019 may have resulted in some taxpayers no longer qualifying for the relief. Personal company For example, an individual disposing of shares in a company is eligible to claim ER if throughout two years (increased from one year, for disposals… Read More »