Following the unexpected change to Entrepreneurs' Relief with the introduction of new qualifying criteria, HMRC has published amended provisions relating to the “personal company” tests.
From 29 October 2018, to qualify as a “personal company” the following criteria must be met by the claimant:
- Own at least 5% shareholding in a trading company; and
- By virtue of that holding:
- Is beneficially entitled to at least 5% of profits available for distribution; and
- Is beneficially entitled to at least 5% of the assets of the company available for distribution on winding up.
- Exercise at least 5% voting rights in a trading company;
Even for those who previously benefited, it would be advisable to review the shareholding of their personal company to ensure they will still qualify.
For further information, please see our latest fact sheet on Capital Gains Tax, which has a detailed section on Entrepreneurs' Relief.
If you would like to discuss Entrepreneurs' Relief and your personal circumstances, please do get in touch with the tax team at DRG Chartered Accountants.
DISCLAIMER: This information is for guidance only, and professional advice should be obtained before acting on any information contained herein. We will not accept any responsibility for loss to any person as a result of action taken or refrained from in consequence of the contents of this publication.