CG17938 - Taper relief: business asset: trustees

TCGA92/SCHA1/PARA5 (3)

TCGA92/SchA1/para 5 explains when an asset (other than shares (or securities, or interests in shares or securities, see CG17930) is a business asset in relation to its disposal by the trustees of a settlement. The rules which apply are different for holding periods between 6 April 1998 to 5 April 2000, 6 April 2000 to 5 April 2004, and from 6 April 2004.

Rules for periods between 6 April 1998 to 5 April 2000

For holding periods prior to 6 April 2000 an asset which is disposed of by the trustees of a settlement will be a business asset at any time when the asset was used wholly or partly for the purposes of:

• a trade carried on:
• • by the trustees of the settlement (but not where the trustees are members of a partnership), or
  • by an eligible beneficiary, see CG17965, or
  • by a partnership of which an eligible beneficiary is a member, or
  • by a company which was a qualifying company by reference to the trustees or an eligible beneficiary, see CG17948, or
  • by a company in a trading group where the holding company was a qualifying company by reference to the trustees or an eligible beneficiary, see CG17953

• an office or employment held by an eligible beneficiary with a trading employer (including activities carried on by a trader who is not a company) to which the beneficiary is required to devote substantially the whole of his time, or
• an office or employment held by an eligible beneficiary who was a full-time working officer or employee of a trading company, see CG17953.

Rules for periods between 6 April 2000 and 5 April 2004

The changes from 6 April 2000 are:

• the rules for the eligible beneficiary were changed and the requirement from then is that the eligible beneficiary has an office or employment with a person carrying on a trade. There is no minimum working time requirement.
• the asset may qualify as a business asset where it is used for the purposes of a trade carried on by a partnership whose members at the time in question included the trustees of the settlement or any one or more of the persons who at that time were trustees of the settlement (so far as acting in their capacity as such trustees)
• a company will also be a qualifying company by reference to the trustees of a settlement where
• • the company is not a trading company or the holding company of a trading group, and
  • an eligible beneficiary was an officer or employee of the company, or of a company having a relevant connection with it, see CG17953, and
  • the trustees do not have a material interest in that company, see CG17948.

Rules applying for periods from 6 April 2004

An asset which is disposed of by the trustees of a settlement was a business asset at a time when it was being used, wholly or partly, for the purposes of:

• a trade carried on by:

• any office or employment held by an eligible beneficiary with a person carrying on a trade.