Lessons on entrepreneurs’ relief claims

Key points

• Entrepreneurs’ relief claimed on the disposal of shares in a trading company.
• The company’s business involved holding developing and leasing properties.
• The tribunal had to establish the extent of trading and non-trading activities and whether the latter were substantial.
• There is no strict numerical threshold in the legislation to determine ‘substantial’.
• The tribunal reviewed the company’s income and its activities with regard to the development of its properties.
• Do the company accounts support a contention that a company is trading?
• It is necessary to focus on the company’s activities during the relevant period.

The decision of the First-tier Tribunal in Dr Allam (TC7532) covered several tax aspects. First procedural matters concerning the opening of HMRC’s enquiry into the...