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Trading activities: A question of substance

By Ken Moody CTA, May 2021

Ken Moody analyses what may be regarded as ‘substantial’ non-trading activity affecting a company’s status for various capital gains tax relief purposes in the light of recent case law and its effect of non-statutory clearance applications.  

Capital gains tax (CGT) and business asset disposal relief (BADR) may apply to a disposal of company shares provided that:  

  • the company is the individual’s personal company; 
  • the company is an unquoted ‘trading company’ or ‘holding company’ of a ‘trading group’;  
  • the shares have been held for two years (for disposals on or after 6 April 2019). 

Trading company? 

The above terms are defined by TCGA 1992, s 165A.

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