Commentary

C3.1302A Business asset disposal relief on disposal of shares—personal company rules

Capital gains tax
Capital gains tax | Commentary

C3.1302A Business asset disposal relief on disposal of shares—personal company rules

Capital gains tax | Commentary

Business asset disposal relief on disposal of shares in a company

C3.1302A Business asset disposal relief on disposal of shares—personal company rules

Business asset disposal relief, which was previously known as entrepreneurs' relief prior to April 2020, is available on a disposal of shares in, or securities of, a company provided one of conditions A, B, C, or D is met (or for disposals before 6 April 2013, if condition A or B is met).

Condition A

Condition A1 is that throughout the period of two years ending with the date of disposal (one year for disposals before 6 April 2019):

  1.  

    (a)     the company is the individual's personal company and is either a trading company or the holding company of a trading group, and

  2.  

    (b)     the individual is an officer or employee of the company or (if the company is a member of a trading group) of one or more companies in the group

This condition can be satisfied if throughout part of the period of two years the company was a trading company, and throughout the remainder of the period it was the holding company of a trading group2.

Where an individual disposes of shares he has previously acquired wholly or party in exchange for the transfer of a business as a going concern under TCGA 1992, s 162 (see Division B9.1) he is treated as meeting condition A for any period ending immediately before that transfer throughout which he owned the business3.

Condition B

Condition B4 is that the company ceases

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