Kevin Read considers a recent entrepreneurs’ relief case that examined the definition of ‘qualifying trading company’ and what constitutes non-trading activities.
The recent First-Tier Tribunal (FTT) case Jacqueline and Neil Potter v HMRC  UKFTT 554 (TC) considered whether entrepreneurs’ relief (ER) was available on the liquidation of a company that had previously been trading.
It is an interesting case, as it considered two different matters. Firstly, had the liquidation actually happened within three years of cessation of trade? Secondly, had the company (Gatebright Ltd) been a qualifying trading company for the twelve months up to cessation of trade? (Note that, following FA 2019, the latter qualifying period would now be 24 months).
The family owned all the shares in Gatebright Ltd, which traded on the London Metals Exchange. Following the financial crash, it sought to