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Entrepreneurs’ relief – nothing personal

By Mark McLaughlin, May 2019
Mark McLaughlin highlights a case which underlines the importance of forward planning for tax purposes and ensuring that decisions are properly documented. 

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 from 6 April 2019) the company is the individual’s personal company and is a trading company (or the holding company of a trading group) and the individual is an officer or employee of the company (or a trading group member) (TCGA 1992, s 169I(6)).

The meaning of ‘personal company’ (in s 169S(3)) changed for disposals from 29 October 2018. For earlier disposals, a company
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