Do your shares qualify for Entrepreneurs’ Relief?

17th October 2017 | Posted in: PAYE & NI, Planning capital gains tax

In order for a shareholder to qualify for Capital Gains Tax (CGT) entrepreneurs relief on the disposal of their shares, they must be an officer or employee of the company (or group) and hold 5% or more of the company’s ordinary share capital and voting rights for 12 months prior to the disposal. The company must also be a trading company or the holding company of a trading group throughout the same 12 month period.

In a recent tax case, the judge agreed with HMRC that in determining whether or not the shareholders held the required 5% of the ordinary share capital, all of the company’s shares should be considered except those with a fixed rate of dividend (preference shares). A lower court had previously decided that shares with no entitlement to dividends and voting rights could be disregarded.

If you have any questions on this blog or on any aspect of CGT, please do not hesitate to Contact Us

Enough shares to qualify

If you feel we could help you and would like to discuss any of the above, please contact Kenny McNeill CTA on 0131 317 7377 or email to kenny.mcneill@jsca.co.uk.
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