A corporate partner of an LLP ceased trading in April 2014 before the new rules were introduced on 18 March 2015. Are they still entitled to Entrepreneur's relief if the company makes a capital distribution now? This is within the 3 year rule but I am struggling to interpret the rules as to whether the company would have been classed as trading.
Clearly, if the company ceased trading on or after 18 March 2015 they would not be entitled to relief but the trade finished before this date.
Any guidance would be much appreciated!
Replies (5)
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That is the point Andrew. Prior to the changes a corporate partner in a trading LLP was regarded as trading (by virtue of TCGA 1992, sections 59 and 59A) , but not after the change.
@OP My reading of the change is that a corporate member of a trading LLP was a trading company up to 18 March 2015 (or earlier cessation), so in my view you have a valid ER claim.
Thanks Portia
That is the point Andrew. Prior to the changes a corporate partner in a trading LLP was regarded as trading (by virtue of TCGA 1992, sections 59 and 59A) , but not after the change.
@OP My reading of the change is that a corporate member of a trading LLP was a trading company up to 18 March 2015 (or earlier cessation), so in my view you have a valid ER claim.
That's interesting. We had a similar case last year and were advised the complete opposite by a well known tax helpline - hence my question. In our case the company had traded in its own right within three years so it wasn't an issue anyway.
Next time I'll just phone you :)
Agree with Portia
I agree with Portia - a cessation before the change on 18 March 2015 should still qualify for ER on a share disposal within 3 years.
Cathy