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Trading company for business asset disposal relief

02 January 2024 / Kevin Slevin
Issue: 4918 / Categories: Comment & Analysis , BADR , TCGA 1992 , trading company status , Capital Gains
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Key points

  • Business asset disposal relief may be available for shares sold in a company that has never traded.
  • The definition of trading company found in TCGA 1992 s 165A is to be adopted for BADR purposes but subject specific modifications.
  • When can a joint venture be considered a trading company?
  • The activities of a joint venture company are only to be attributed to a company under s 165A(7) if the individual seeking to claim BADR can show that they pass the ‘shareholding test’ and the ‘voting test’.
  • Provide a full explanation of the basis of the claim to HMRC.

What follows raises the possibility of capital gains tax business asset disposal relief (BADR) being available in respect of gains realised on a share disposal where the company to which the shares relate is not carrying on a trade (nor need it be the holding company of a trading...

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