The recent increase in the amount of lifetime gains that can be sheltered from the main capital gains rate of 28% by claiming Entrepreneurs’ Relief, means that certain lifetime gains of up to £10m can now qualify for this relief and will reduce CGT payable to just 10% of the taxable gain.
However to qualify for this relief you will need to satisfy certain criteria:
1. The relief is only available to individuals, not companies.
2. Only disposals of trading businesses qualify for the relief. It is wise therefore to avoid building up investments within a trading company.
3. Individuals disposing of shareholdings in trading concerns need to hold some form of employment in the organisation.
4. They should also hold 5% or more of the voting capital if shares in a trading company are involved.
All the disposal conditions need to be met for at least 12 months prior to the disposal.
For more detailed advice on this topic please give us a call.