BL - Tax - Individual BADR

Question 1

What is the rate of CGT for Business Asset Disposal Relief?

Answer 1

10%

Question 2

What are qualifying assets for BADR?

Answer 2

• all or part of a trading business
• assets used in a business that used to trade
• shares in a trading company
• shares in a company that used to trade

Question 3

What are the qualifying conditions for BADR for all or part of a trading business?

Answer 3

• all or part of a trading business
• must be trading business
• must be owned for 2 years prior to the disposal

Question 4

What are the qualifying conditions for BADR for assets used in a business that used to trade?

Answer 4

• business must have been owned for 2 years before it ceased to trade
• assets must have been used in business when it ceased; and
• assets must be disposed of within 3 years of the business ceasing to trade.

Question 5

What are the qualifying conditions for BADR for shares in a trading company?

Answer 5

• trading company for 2 years before the disposal
• shares held for 2 years prior to the disposal
• the person disposing must be:
  
  • an officer or employee of the company
  • holds at least 5% of the ordinary voting shares and entitled to at least 5% of the profits available for distribution and 5% of the assets on winding up.
  • for at least 2 years prior to the disposal

Question 6

What are the qualifying conditions for BADR for shares in a company that used to trade?

Answer 6

• shares held for 2 years prior to the company cessation to trade
• the person disposing must be:
  
  • an officer or employee of the company
  • holds at least 5% of the ordinary voting shares and entitled to at least 5% of the
    profits available for distribution and 5% of the assets on winding up.
    for at least 2 years prior to the cessation of trade.
  • shares must be disposed of within 3 years of the company ceasing to trade.

Question 7

Is a claim required for BADR?

Answer 7

Yes

Question 8

What is the lifetime allowance for BADR?

Answer 8

£1 million