Mark McLaughlin looks at a case in which a potential ‘loophole’ in the entrepreneurs’ relief legislation was exposed.
Entrepreneurs’ relief (ER) is a valuable and much sought after capital gains tax relief. However, the conditions for claiming the relief are often problematic.
For an individual shareholder disposing of shares in a company, the most common condition for relief is that throughout a two-year period ending with the date of disposal, the company is the individual’s ‘personal company’ and a trading company (or the holding company of a trading group), and the individual is an officer or employee of the company (or trading group member) (TCGA 1992, s 169I(6)).
The definition of ‘personal