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Does this qualify for entrepreneur’s relief?

Mr A sells his unquoted trading shares (over 5%) to his family trust. He remains at the company and it continues as normal. This transaction will clearly trigger a CGT charge however, as the shares are still an asset of a continuing business for which he is involved, will he get ER on the sale?

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In essence share sales of any size or proportion (providing the other qualifying conditions are met) will qualify for ER. There is no requirement for a complete disposal.

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Are you sure

Even if he is a beneficiary of the trust?

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Yes, sure.  The trustees will acquire the market value of the shares as their base cost.  The shares dont belong to the beneficiary.  What type of trust is it?

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Not 100% sure

However, the specialists who advised on this tax planning said the trust could be reversed (cancelled?) if a planned sale didn't materialise after the transfer (same tax year). These advisers have said no ER due.

This trust was created to bank the 18% as at the time the proceeds exceeded the ER limit.


many thanks

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