Reliefs

Question 1

What is Entreprenerurs’ Relief?

Answer 1

First £10m of gains on ‘Qual Bus Disp’ taxed at 10%
10% CGT rate calculated AFTER allowable losses and AEA
Choose to set losses and AEA against non-qual gains first
For 2019/20 disposals -
Relief must be claimed by 31 January 2022

Question 2

Qualifying Business Disposals for ER?

Answer 2

Disposal of whole or substantial PART of indiv’s trading business
Disposal of Assets (NOT SHARES) of indiv or partner’s trading business that has now ceased
Disposal of shares if indiv’s Personal Trading company (5% held and 5% voting rights) and EE of company
Disposal of assets owned by indiv and used in personal trading company or partnership as long as indiv disposes of ALL or part of partnership interest in PTC as part of their withdrawal of involvement

Question 3

Disposal of Goodwill to a CLOSE company?

Answer 3

ER not available in respect of goodwill unless individual is:
A retiring partner;
holds less than 5% of ord shares or voting rights;
holds more than 5% of ord share or voting rights but sells shareholding to another within 28 days

Question 4

Does an isolated disposal of a individual business asset qualify for ER?

Answer 4

NO

Question 5

Qualifying Period for ER?

Answer 5

2 years prior to disposal;
Where qual business asset is not disposed but simply ceases - relief will be avail on gains on assets in use in the business at the time it ceases;
where the assets are disposed of within 3 years of the date of cessation
For approved EMI shares, qual period runs from date option is granted (not when acquired)

Question 6

How to Apply ER?

Answer 6

Calc Gains and Losses on Qual and Non Qual assets separately;
Net off losses relating to qual assets against qual gains;
Offset other losses and the AEA against non qual gains;
Deduct any remain loss or AEA from qual gains
Tax at 10% or non-qual at 10% or 20% depending on TAxpayer

Question 7

What is Investor’s Relief?

Answer 7

On 6 April 2016, investor’s relief was introduced - extend benefit or ER to certain investors who would not meet conditions for ER

Question 8

What does IR apply to?

Answer 8

Disposal of unlisted ord shares in trading company;
Subscribed for on/after MArch 2016;
Held for min 3 years starting on 6 April 2016;
By an individual that is not EE of a company
Seperated Lifetime limit of £10m.

Question 9

PPR what is it?

Answer 9

Exemption of gain on principal private residence, reduced for period of non-occupation
Relief = Gain x (Periods of Occupation/Periods of Ownership)

Question 10

Deemed Occupation includes?

Answer 10

Up to 3 years - any reason
Any period - employed abroad;
up to 4 years - working elsewhere in UK(Emp or SEmpl) or Working abroad If Semp;
MUST BE ACTUAL OCCUPATION B4 AND AFTER;
Condition relaxed if reoccupation prevented by employment ;
LAST 18 M of OWNERSHIP

Question 11

If property let - what are the reliefs?

Answer 11

Letting relief (lower of)
£40,000
PPR Relief
Gain re letting