CG17936 - Taper relief: business asset: assets other than shares: Taper relief does not apply to disposals before 6 April 1998 or after 6 April 2008

TCGA92/SCHA1/PARA5

TCGA92/SCHA1/PARA5 explains when assets other than shares may be business assets.

A disposal of an asset other than shares (or securities or interests in shares or securities, see CG17930) may also qualify as the disposal of a business asset. The conditions to be met for the asset to be treated as a business asset are dependent on whether the disposal was made by an individual, the trustees of a settlement, a deceased individual's personal representatives or by an individual who acquired the asset as legatee.

An asset will qualify as a "business asset" only when it is used wholly or partly for the purposes of a trade where certain conditions are met.

An asset used for a Schedule A business of letting furnished holiday accommodation, see CG73500, is an asset used for a trade if the furnished holiday accommodation business is treated as if it were a trade. An asset used for the purposes of any other Schedule A business will not qualify as a business asset by virtue of its use in that business. It may, nonetheless, qualify as a business asset depending on who occupies it and for what purpose (see CG17937).

Example 

An individual landlord owns two factories that are let out. One is let to a local trading partnership which uses it in its trade. The partnership has at least one individual as a partner. The landlord is not a member of the partnership. The other is let to an unlisted trading company which uses it in its trade. The property let to the partnership does not qualify as a business asset before 6 April 2004, see CG17937, as the landlord is not a member of the partnership. The letting to the partnership, as it includes at least one individual as a member, qualifies the factory as a business asset for periods from 6 April 2004. The letting of the factory to the company qualifies it as a business asset for periods from 6 April 2000, see CG17937, as the company is a qualifying company by reference to the landlord, being an unlisted trading company, as long as the factory is used for the purposes of that company's trade.