Entrepreneurs' Relief and Trusts

Entrepreneurs' Relief and Trusts

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Having read BN48 on entrepreneurs' relief, can anyone enlighten me whether a trust that lets a property to a commercial business, will be entitled to entrepreneurs' relief.

BN48 says that a qualifying beneficiary must have a qualifying interest in the business in question. Does that mean that the beneficiary themselves has to carry on the business because strictly speaking the beneficiary just receives the rental income from letting the property to a business and does not actually carry on any business.
Churchill

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By User deleted
01st Apr 2008 14:01

Trustees’ relief unlikely
A claim by the trustees’ for entrepreneurs’ relief seems unlikely, on the basis of information given by Churchill.

A key requirement of ER is that there is a sale of a trading business, carried on through as a sole trader or through a partnership, or in a company meeting various conditions. This is extended to trustees carrying on a trade or owning suitable shares where an individual has an interest in possession. There is also the possibility of a claim for relief under the associated disposal rules, where the individual sells assets used by the partnership or the company.

If the trustees only own a rental property, then ER will not be available. However my reading of the rules is while trustees can claim ER where the trustees carry on a trade etc, there is nothing to allow say an individual to carry on a trade but for trustees to claim ER under the associated disposal rules where they own an asset used in the trade.

The following gives a link to a summary of ER-
http://www.chiene.co.uk/pdf/entrepreneurs.pdf

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