My client has held 10% of the voting shares of a trading company since he joined them as an employee on 1.2.07. He was sacked on 1.3.08 with immediate effect. He has recently sold the shares. Does he qualify for entrepreneurs' relief?
SD
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Probably not.
To qualify for relief the owner of the shares has to have been an employee for the period of 12 months ending with the date of the disposal of the shares (S169I(2)(c) and 169I(6)).
The only possible exception would be if the company has ceased to be a trading company in which case if the share owner was an employee or office holder for a peeriod of 12 months prior to the cessation of the company's trade he then has three years from the date of cessation of the trade to dispose of the shares (Section 169I(7)).