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Chapter 15 - Business reliefs - Coggle Diagram
Chapter 15 - Business reliefs
Entrepreneur's relief
Relief covers the first 10 million of chargeable gains on the disposal of:
Whole or part of business: only available for gains on business assets, not investment
Shares in trading company (at least 5%) and also an officer or employee of that company
*
Must be satisfied for at least 2 yrs
Gains qualifying for entrepreneur relief are tax at 10% regardless of taxable income
Gains qualifying for entrepreneur relief will reduce any unused BR band
Claim must be made by first anniversary of 31 Jan following the tax year of disposal
Investor's relief
Similar to entrepreneur's relief: gains on disposal of the share are taxed at 10%
Shares must be issued directly to tax payers on or after 17 Mar 2016 and held for at least 3 yrs
Separate 10 million allowance is available
Must not be an employee of that company
Gift relief
Disposals by gift or sale at under MV are chargeable to CGT, with proceeds = MV
Conditions: Disposal is made to UK residents & disposal is of business asset in donor's trade, unquoted share or quoted share (>= 5%)
Taxed now = actual proceeds receive - original cost. Then rest of gain is held over into base cost
Where taxpayer's personal company invest in net asset, gift relief is restricted. Gain eligible = Total gain * MV of CBA/ MV of CA. CBA is chargeable business assets (except investment) & CA is chargeable asset (asset not exempt from CGT)
Replacement of business asset relief
Qualifying assets
Ewe and cow premium quota (individual only
Milk and potatoes quotas (individuals only)
Satellites, space stations, space crafts
Ship, aircraft, hovercraft
Goodwill (individual only)
Fixed plant and machinery
Land and buildings
Timing: Purchase of replacement may be 12 months before disposal or 36 months after disposal
Tax now = Any proceeds not reinvested are tax immediately, rest is deferred till the earliest of: 1. 10 years 2. New asset sold 3. Cease using in trade