Capital Gains Tax Entrepreneurs Relief (ER)

Everyone knows about ER. Or do they? We all know it is potentially a very valuable relief which allows you to pay CGT at 10% rather than 28%. But you’d be surprised at how many anomalies there are in the rules. So much so that just a few weeks ago the Institute of Chartered Accountants Tax Faculty published guidance notes.

What can you do if there’s an imminent sale of a company and one shareholder qualifies for ER and other doesn’t? Does it matter if that shareholder is a spouse or some other relation? What if it’s a sale of a sole trader business from premises owned by the trader and his or her spouse? Don’t just focus on the proceeds. Take advice and focus on what you’ll be left with a year later after HMRC have taken their share of the booty.

And, as we’ve said before, plan ahead!

Update: Entrepreneurs’ Relief became known as Business Asset Disposal Relief from 6 April 2020.

 

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