Business asset disposal relief (previously entrepreneurs' relief) and share options
Produced in partnership with Andrew Evans
Business asset disposal relief (previously entrepreneurs' relief) and share options

The following Share Incentives practice note produced in partnership with Andrew Evans provides comprehensive and up to date legal information covering:

  • Business asset disposal relief (previously entrepreneurs' relief) and share options
  • Background and main requirements for the relief
  • Procedures
  • EMI schemes
  • Impact of exercise of options and other dilution events on existing shareholders
  • CSOP options
  • Unapproved options
  • SAYE option
  • SIP
  • BADR Arrangements for MBOs

Business asset disposal relief (previously entrepreneurs' relief) and share options

FORTHCOMING CHANGE: On 14 July 2020, the Office of Tax Simplification announced that it is conducting a review of capital gains tax (CGT), seeking both high-level comments on the principles of CGT, and more detailed comments on the technical detail and practical operation of CGT. See News Analysis: OTS review of capital gains tax—background, scope and next steps. On 11 November 2020, the OTS published a report setting out a framework within which the government could consider simplifying the design of CGT. See News Analysis: OTS Capital Gains Tax Review: Simplifying by design. On 20 May 2021 the OTS published a second report on simplifying practical, technical and administrative issues in relation to CGT, in which it made 14 recommendations. See: Share Incentives weekly highlights—27 May 2021 — OTS publishes second report on its CGT review.

Background and main requirements for the relief

Business asset disposal relief (BADR), is available for shares in trading companies and the holding companies of trading groups provided the conditions in sections 169H–169SH of the Taxation of Chargeable Gains Act 1992 (TCGA 1992) are satisfied. Although it was previously known as entrepreneurs’ relief, it is renamed as business asset disposal relief with effect from 6 April 2020.

BADR results in a capital gains tax (CGT) rate of 10% on lifetime chargeable gains up

Popular documents