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A restriction to the associated disposals rules for entrepreneurs’ relief?
A claim by a shareholder for capital gains tax entrepreneurs’ relief on the sale of a property that has been used in the company’s business is made under the associated disposals provisions.
The provisions have a number of restrictions to the relief available including whether the property has not been used in the company’s business throughout the period of ownership.
Therefore a strict interpretation of the legislation would be that if the shareholder had owned the property for 40 years previously used the property in his sole trade business for 20 years incorporated the business leaving the property outside the company and then used the property in the company’s business for 20 years there would be a 50% restriction of the entrepreneurs’ relief available on sale even if no other restrictions were relevant.
Query 18 421– Edward Redwood
