You may be able to pay less Capital Gains Tax when you sell all or part of your business. Business Asset Disposal Relief (formerly known as Entrepreneurs Relief) means you will pay tax at 10% on qualifying assets, instead of the normal rate of 18% or 28%. Entrepreneurs’ tax relief is currently available on up to £1 million lifetime gains.
Business Asset Disposal Relief (BADR) is available on the disposal of all or part of a business that an individual has owned for at least one year prior to the date of disposal. The disposal must be of assets comprising the business, and not just of assets used in the business. To claim relief, you have to satisfy a number of conditions through the qualifying period, which depend on the type of business disposal you've made.
The government will continue to back entrepreneurs - but wants to ensure relief is focused on supporting and encouraging longer-terms investment in the economy. Disposals made on or after 6 April 2019 individuals will need to meet the qualifying conditions for two years to be eligible for the relief, up from the current 12 months. These conditions are set out in full on the gov.uk website.
It is best practice to speak with your personal tax advisor, but bear in mind that the following requirements:-
If you dispose of any of the following you will qualify for entrepreneurs relief
If you are selling all or part of your business, all the following must apply:
If you are selling shares, all the following must apply for at least one year before you sell your shares:
If you are selling assets you lent to the business all the following must apply:
Full details of Business Asset Disposal Relief can be found by accessing the Gov.UK website or by clicking on the following link https://www.gov.uk/business-asset-disposal-relief or speaking with your tax adviser.
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