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