Entrepreneurs Relief Sale of Business / Part of a Business

Author

Andy Wood

Andy is a practical, creative tax adviser who assists a variety of clients in achieving their personal and commercial objectives in the most tax efficient manner.

Entrepreneurs Relief – Sale of Business & Part of a Business – Introduction

As discussed in other articles in this signpost, Entrepreneurs Relief is an incredibly attractive relief for those disposing of all or part of their trading business.

The relief, amongst other types of disposals, will also apply where there is a sale of the whole or part of a trading business.

For the avoidance of doubt, this element of the relief will also apply where there is a disposal of all or part of an interest in a partnership.

Conditions – Entrepreneurs Relief Sale of Business and/or Part of a Business

Firstly, the individual must have owned the business for the two years prior to the disposal.

Business & Not Assets

It should be noted that Entrepreneurs Relief applies to the disposal of a business whether wholly or in part.

However, it does not apply to the disposal of the assets of either a sole proprietor or a partnership business unless there has been a cessation of the trade.

Additionally, relief can also be claimed in the context of a partnership where there has been an associated disposal of both partnership interest and assets.

Goodwill Restriction

There is a wrinkle where there is a disposal by an unincorporated business to a connected company from 3 December 2014 onwards. Here, any goodwill is treated as an excluded asset – albeit some exceptions do apply.

If you, or your clients, are considering disposing of any business assets then we would recommend obtaining tax advice in advance of such a transaction as relief might be secured with some pre-sale planning.

If you have any queries regarding our article on or Entrepreneurs Relief in general then please do get in touch.

For our full and detailed sign post document on Entrepreneurs Relief then please visit here.

 

 

 

Entrepreneurs Relief Sale of business / part of a business was last updated on 20 November 2019

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