No longer a business asset?

No longer a business asset?

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My client is to dispose of an asset he has owned for 10 years. During the first nine years or ownership the asset was used in the business. During the last year the asset has not been used within the business and perhaps more importantly, at the date of sale the asset will not be being used in the business.

Whilst the taper relief rules are clear (9/10ths of the gain will attract BATR), are the new Entrepeneurial relief rules similar or will all relief be denied because at the date of sale the asset is a non buisiness asset?

Thank you
Stormrider

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By AndRob
07th Mar 2008 15:47

No longer a business asset?
Reluctantly, I think your conclusion is probably correct.

However, turn it around........an investment company for the first nine out of ten years and a trading company for the last one (qualification for full ER?).

food for thought

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By User deleted
07th Mar 2008 13:47

Entrepreneurs’ relief
A core principle of the proposed ER is that the relief requires a sale of a business or part of business. Unlike BAT there is only limited scope for the relief on a sale of only individual assets.

The four possible routes for relief possibly relevant here would appear to be-
• For a sole trader business, a sale of a part of a business.
• For a partnership, a sale of a part of a business, and any associated disposals of personally owned assets.
• For a company, a sale of shares, and any associated disposals of personally owned assets.
• For a trade that has ceased the sale of assets under the post cessation rules.

The description of the situation by Stormrider would suggest that none of these are possible routes to ER in the circumstances. Perhaps thought should be given to a disposal triggered under the current tax rules.

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By User deleted
07th Mar 2008 14:42

Thanks
Thank you Dunedin

Yes i agree, one needs to get on with it!

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