The government has now tabled an amendment to Paragraph 2 of Schedule 15 of the Finance Bill, which contains the changes to the definition of ‘personal company’ for ER purposes. See the proposed amendment here: The amendment will add an alternative test based on the shareholder’s entitlement to proceeds in the event of a sale […]
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ATED
The 5 year valuation rule trap The Annual Tax on Enveloped Dwellings (ATED) contains a trap which can blow-up in your client’s face: the five-year valuation rule. When a residential property is held through a company (or other non-natural person eg a trust) it must be valued on acquisition to determine whether it is worth […]
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Dividend tax rises
On 8 September 2021, the Prime Minister outlined the Government’s plans for health and social care, including a new funding strategy designed to meet social care costs. The plans include increasing National Insurance for employers, employees and the self-employed by 1.25% for 2022/23 only, before launching a new social care levy of 1.25% from April […]
Temporary rate reduction Presenting the Summer Economic Update on 8 July 2020, the Chancellor, Rishi Sunak, announced a much-anticipated reduction in residential stamp duty land tax (SDLT). Where completions take place between 8 July 2020 and 31 March 2021, the residential SDLT threshold is raised to £500,000 from £125,000. The reduction will also benefit those […]
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Entrepreneurs’ Relief
Is the clock ticking ? Speculation is always rife before a Budget as to what the Chancellor’s speech might contain. This year, one of the front runners is the potential abolition of entrepreneurs’ relief. Indeed, the Sunday Times reported on 1 March 2020 that the new Chancellor, Rishi Sunak, will scrap entrepreneurs’ relief to ‘fund a spending […]
Business Asset Disposal Relief (BADR) Business Asset Disposal Relief, formerly known as Entrepreneurs’ Relief, offers a lower rate of Capital Gains Tax (CGT) when selling all or part of a business, shares in a trading company, or certain business assets. From 6 April 2025, the CGT rate under BADR is 14% — up from the […]
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Entrepreneurs’ relief changes
FA 2019, Schedule 16 has introduced four changes to entrepreneurs’ relief (ER). The new conditions for an individual’s shareholding in their personal company to qualify for ER took effect from 28 October 2018. The three other changes to ER take effect for disposals made after 5 April 2019. Qualification period For disposals after 5 April […]
Entrepreneurs’ relief (ER) is widely misunderstood by people who don’t read the legislation. For ER to apply to a gain arising from the disposal of shares or securities, the company must be the individual’s personal company for a full 12 months ending with the disposal date, or the date the company ceases to trade (if […]
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Cash basis for landlords
A voluntary form of cash basis accounting was introduced from 6 April 2013, but only for unincorporated trading businesses with turnover under the VAT threshold. Until 6 April 2017 landlords were required to use accruals accounting for property income. From 6 April 2017 the tables are turned as smaller unincorporated property businesses are required to […]