CG63960 - Entrepreneurs’ Relief: office responsible

The office dealing with the tax affairs of a person claiming Entrepreneurs’ Relief may need to consult other offices in the following circumstances -

• Where there is a disposal of shares it may be necessary to consider if the company in which the shares were held was a trading company or the holding company of a trading group - see CG64060+. The office that deals with the tax return of the company concerned is responsible for confirming whether the company is a trading company or the holding company of a trading group.
• Where the question is whether a person has the requisite interest in the ordinary share capital and voting rights of a company to make it their ‘personal company’, see CG64050, the office that deals with the tax return of the company is similarly responsible for answering this question.
• Trustees may dispose of an asset other than shares, where qualifying status depends on the asset being used for the purposes of a trade carried by a qualifying beneficiary. That question should be addressed by the office that deals with the tax return of the business carried on by the qualifying beneficiary.
• Relief due on a disposal by trustees will count towards a qualifying beneficiary’s lifetime limit. The office dealing with the individual is responsible for confirming the amount of relief available within the lifetime limit.

Records

Under Self Assessment it is the claimant’s responsibility to maintain a record of all gains on which Entrepreneurs’ Relief is claimed.

Relief may be due on more than one occasion and as there is a lifetime limit on the total relief which is available to any individual (or trustees by reference to the qualifying beneficiaries lifetime limit) relief allowed on an earlier occasion may reduce the amount available on a later disposal. It is appropriate therefore that a record is kept of all amounts of qualifying gains upon which Entrepreneurs’ Relief has been given and the balance of relief remaining available.

For individuals this detail could conveniently be kept as a 5 column record on the Self Assessment permanent notes facility as follows: