This year’s Act introduced a number of changes relating to entrepreneur’s relief (ER). While concerns that the relief might be abolished in its entirety to eliminate its estimated £2.7bn cost to the Treasury were ill founded the changes are likely to have a substantial impact.
Personal company requirements
A major amendment has seen the requirement for the person claiming the relief to have a minimum 5% interest in the share capital of company extended from applying only to voting power and nominal value to encompass a requirement for the individual to be entitled to receive either:
5% of the dividends and assets available to ‘equity holders’ on a winding up of the business; or
5% of the sale proceeds due to holders of ordinary shares on a notional disposal of the company.
The second qualifying test was introduced at a late stage in order to simplify the determination of whether relief is available. In...
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This year’s Act introduced a number of changes relating to entrepreneur’s relief (ER). While concerns that the relief might be abolished in its entirety to eliminate its estimated £2.7bn cost to the Treasury were ill founded the changes are likely to have a substantial impact.
Personal company requirements
A major amendment has seen the requirement for the person claiming the relief to have a minimum 5% interest in the share capital of company extended from applying only to voting power and nominal value to encompass a requirement for the individual to be entitled to receive either:
5% of the dividends and assets available to ‘equity holders’ on a winding up of the business; or
5% of the sale proceeds due to holders of ordinary shares on a notional disposal of the company.
The second qualifying test was introduced at a late stage in order to simplify the determination of whether relief is available. In...
If you or your firm subscribes to Taxjournal.com, please click the login box below:
If you do not subscribe but are a registered user, please enter your details in the following boxes:
