Rather than assuming you qualify for Entrepreneurs Relief, make sure you do!
Entrepreneurs relief - do you qualify?
Entrepreneurs Relief is now worth up to £1.8 million; and is therefore a very valuable tax relief. The relief can be available in a wide range of scenarios including:
- Disposals of shares by employees and officers of the company
- Disposals of businesses by sole traders and partnerships
- Associated disposals of business assets owned personally
The leglislation is detailed and complex, and there are a number of points to consider when ensuring that you qualify for the relief, including: entitlement to voting rights, the order of disposals and phased disposals.
Relief on disposals
Disposals of qualifying furnished holiday lettings and certain disposals by trustees may also qualify for relief.
A review of the position now could provide some simple changes now, such as structuring non qualifying activities separately, could ensure that a future disposal benefits from the reduced rate of tax.
Most importantly, and quite often overlooked, is the fact that the qualifying criteria need to have been met throughout the year prior to disposal.
Sometimes it's simply too late to consider once a buyer is already interested, so speak to us today.