CG17937 - Taper relief: business asset: individuals

TCGA92/SCHA1/PARA5 (2)

The rules for assets (other than shares (or securities, or interests in shares or securities, see CG17930) which are disposed of by an individual to qualify as business assets in relation to the individual are set out in TCGA92/SchA1/para 5. Changes to these rules were made in FA 2000 and 2001 and have effect for periods from 6 April 2000. Further changes were made in FA 2003 and these have effect for periods from 6 April 2004.

Rules for periods between 6 April 1998 and 5 April 2000

The rules before 6 April 2000 are that the asset was a business asset in relation to the individual at any time if at that time it was being used, wholly or partly for the purposes of one or more of the following:

• a trade carried on by
• • the individual,
  • a partnership of which the individual was at that time a member,

• a trade carried on by a company which at that time was a qualifying company by reference to the individual, see CG17948, or
• a trade carried on by a company in a trading group where the holding company was at that time a qualifying company by reference to the individual, see CG17953,
• an office or employment held by the individual with a trading employer (including activities carried on by a trader who is not a company) to which the individual was at that time required to devote substantially the whole of his time.
• an office or employment held by the individual as a full-time working officer or employee of a trading company, see CG17953.

Rules for periods between 6 April 2000 and 5 April 2004

From 6 April 2000 the rules are as above but are modified as set out below:

• all offices and employments with a trading employer qualify whether or not the individual concerned was required to devote substantially the whole of their time to the office or employment and whether or not they were a full-time working officer or employee of a trading company.
• a company will also be a qualifying company by reference to an individual where
• • the individual is an employee of the company, or a company having a relevant connection with that company, see CG17953, and
  • the company is not a trading company or the holding company of a trading group, and
  • the individual does not have a material interest in that company, see CG17948.

If the individual acquired the asset as a legatee, see CG17940.

Rules applying for periods from 6 April 2004

A business asset includes an asset which is disposed of by an individual, at a time when it was being used, wholly or partly, for the purposes of:

• a trade carried on by any individual or a partnership of which any individual was at that time a member, or
• a trade carried on by the trustees of a settlement or a partnership whose members at that time included -
• • the trustees of a settlement, or
  • any one or more of the persons who at that time were the trustees of a settlement (so far as acting in their capacity as trustees), or

• a trade carried on by the personal representatives of a deceased person or a partnership whose members at that time included -
• • the personal representatives of a deceased person, or
  • any one or more of the persons who at that time were the personal representatives of a deceased person (so far as acting in their capacity as personal representatives), or

• a trade carried on by a company which at that time was a qualifying company by reference to the individual, see CG17948, or a company which at that time was a member of a trading group the holding company, see CG 17953, of which was at that time such a qualifying company, or
• a trade carried on by a partnership where a member of the partnership was, at that time, a qualifying company by reference to the individual or a member of a trading group the holding company of which was at that time a qualifying company by reference to the individual, or
• any office or employment held by the individual with a person carrying on a trade.

Where the individual acquired the asset as legatee, see CG17940 for times when the asset was held by the personal representatives of the deceased person in question.