Entrepreneurs' relief and incorporation

Entrepreneurs' relief and incorporation

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If a sole trader incorporates a business wholly in exchange for the issue of new shares, can entrepreneurs' relief be claimed before applying relief under section 162 TCGA 1992, so that in effect only the gain after entrepreneurs' relief is rolled over?
Sonia

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By User deleted
21st May 2008 09:19

Deja vu
All us oldies are saying it; welcome back retirement relief under another name. This query surfaced from time to time in the past and the answer was that HMRC stuck to a fundamental principle: roll-over (which is what S.162 is) takes precedence. I deem it a very fair bet that the same tack will be taken with regard to ER so, no Sonio, ER will not be in the frame at this point. Of course, the entrepreneur can now elect to disapply S.162 or, perhaps, arrange for part of the consideration to be in cash. In these situations, there will be immediately taxable gains and, assuming all conditions are satisfied, ER can be claimed.

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