Search news archive

 

 

t: 023 80 254 900

f: 023 80 254 906 

e: info@dtlimited.co.uk--------------91 Lakewood Road, Chandlers Ford, Eastleigh, SO53 5AD

Entrepreneurs’ relief changes

Source: HM Revenue & Customs | | 06/11/2018

In the Budget, the Chancellor, Philip Hammond announced two changes to the way Entrepreneurs’ Relief (ER) will operate. ER applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where this relief 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 ER.

The first change came into with immediate effect on 29 October 2018 with the introduction of two new tests to the definition of a personal company for ER. These tests require the claimant to have a 5% interest in both the distributable profits and the net assets of the company in order to qualify for ER. The new tests must be met, in addition to the existing tests, throughout the specified period in order for relief to be due.

The second change increases the minimum period during which certain conditions must be met to qualify for ER from one to two years. This measure will have effect for disposals on or after 6 April 2019, unless a business ceased operating before 29 October 2018. This measure will ensure that taxpayers looking to claim ER will be required to have a longer term interest in their business for an extended period of time.

These changes will affect a significant number of taxpayers looking to claim ER especially those involved with a business over a short-term period. However, there had been suggestions that ER could have been abolished completely, which would have had a far wider impact on investors.



 

Latest News

Topping up your self-employed NIC contributions
13/03/2019 - More...
In many circumstances it can be beneficial to make voluntary Class 2 National Insurance Contributions (NICs) to increase your entitlement to benefits, including the State or New

Lost your Unique Tax Reference number?
13/03/2019 - More...
Your Unique Taxpayer Reference (UTR) identifies your tax records at HMRC. The number is also known as your taxpayer number or tax reference number and should be used whenever you

Treatment of deposits for VAT purposes
13/03/2019 - More...
As a general rule, most deposits made by customers serve as advance payments and create a VAT tax point when the deposit is received. It is important that businesses ensure that

What are the badges of trade?
13/03/2019 - More...
The 'badges of trade' tests, whilst not conclusive, are used by HMRC to help determine whether an activity is a proper economic / business activity or merely a money-making side

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

Copyright © 2019 - David Tilsley Limited
Cookie Policy |  Privacy Notice
Home     About us   Contact us