CG17947 - Taper relief: business asset: non-business taper to override business asset taper

In the circumstances described above, so as to avoid denying both taper relief to the trustees and indexation allowance to the company (if the company had retained the asset) TCGA92/SCHA1/PARA17 allows an asset to qualify only for the non-business asset taper, even if otherwise it would have qualified as a business asset.

• EXAMPLE

A trading company creates an unapproved pension scheme for its directors and senior executives. The funds are invested in shares in a trading company which give the trustees 26 per cent of the voting rights. The trust deed provides that any surplus not required to meet the pensions is to be returned to the company. On the sale of the shares the trustees can only qualify for the non-business rate of taper, even though this is unlikely to be a trust to which TCGA92/S77 applies.