Business Relief

Question 1

Business asset disposal relief

Answer 1

Conditions: whole or part of a business (not investments), disposal of shares in a trading company where the individual has a 5% holding and is an employee (personal company =5% holding).
Asset must be held for 2 years before disposal
£1m lifetime limit - tax at 10%

Question 2

Investor’s relief

Answer 2

10% tax on disposal of shares in unquoted trading companies
Separate £10m lifetime limit
Newly issued shares only (i.e issued from company not bought from someone)
Need to have held for 3 years min
Only for shares issued after March 2016

Question 3

Gift relief (holdover relief)

Answer 3

Defers gain
Reduces base cost for donee
Conditions: must be UK resident, must be business assets, unquotes shares in trading company, quoted shares in a personal trading company (5% at least)

Question 4

Replacement of business assets (rollover relief)

Answer 4

Both assets used in trade
Land / buildings, fixed plant and machinery, goodwill (individuals)
Replacement must have been within 3 years after and 1 year before

Relief: Reduces base cost of replacement asset, any proceeds not reinvested are immediately taxable