10 Aug 2017
Entrepreneurs' Relief applies to the sale of a business, shares in a trading company or an individual’s interest in a trading partnership. Where Entrepreneurs' Relief is available CGT of 10% is payable rather than the normal main rate of 20%. This can significantly reduce the amount of CGT due.
When the relief was first introduced there was a lifetime limit of £1 million for gains. This was increased to £2 million from 6 April 2010, to £5 million from 23 June 2010 and to a generous £10 million from 6 April 2011.
The relief is available to individuals as well as to some trustees of settlements. To qualify, the individual should be either an officer or employee of the company, own at least 5% of the company and have at least 5% of the voting rights. There are also other qualifying conditions that must be met.
Entrepreneurs' Relief is not available to companies or personal representatives of deceased persons or in relation to a trust where the entire trust is a discretionary settlement. The limit applies to all qualifying gains, whatever the year in which they arose.
The lifetime limit means that individuals can qualify for the relief more than once, subject to the over-riding condition that 20% CGT will be charged once the total amount of qualifying capital gains exceed £10 million.
Entrepreneurs' Relief is an important and valuable tax relief for many business owners. There is also a sister relief called Investor’s Relief which has a separate £10 million lifetime cap. This is useful for investors who do not meet the officer or employee requirement for Entrepreneurs' Relief.
We would advise readers who are considering a significant business disposal to take professional advice before signing on the dotted line. Positive tax planning, especially in these circumstances, can only be achieved in advance. The timing and structure of deals can make all the difference to maximising post-tax sales gains.
Vada Studios is a very successful music recording facility. The business had outgrown their existing premises, and had a vision to create one of the top residential recording studios in the UK.
A highly successful restaurant, butcher and retail business.
GJA have been the retained accountants for this property investment and development group for over 20 years. Imminently due to dissolve companies.
Proco approached us with an idea of becoming a distributor of a high-end product in the UK, supplying vinyl nationally.
In 2008 Tom Floate left his employer to set up his own business providing website services. Initially forming a partnership with his wife Rachel, they began trading IO Studios from their home office.
Barry the Butcher is a very successful wholesale butchery and retail business.
Chris works with a diverse profile of owner managed businesses to assist them to grow and retain wealth. Although Chris works with clients from a wide range of sectors, he has particular expertise in property, catering, consultancy and professional services.
Managing Director ACMA
Alex has worked for Grenfell James since 2002 and became a director in 2013. Overseeing our internal operations, he manages the flow of work and ensures we hit our strict deadlines. Alex also manages a portfolio of clients, with expertise in manufacturing and service businesses.
Operational Director MAAT
David has worked for Grenfell James since 2006. He heads up our tax team and is highly experienced with expertise in different industries and sectors.
Tax Director ACCA
Hannah qualified in 2016, having worked for the company since 2009. She acts as a client manager for a range of businesses, with expert knowledge of the equestrian and rural sector. Hannah also manages our payroll team.
Client Manager ACCA
Andrew Knight. The Howard Arms Ilmington
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Mr I Cameron
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Dean. Wootton IT
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Mr J McCarthy
Roy Ferguson. The Perfect Cosmetics Company.
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