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Business Asset Disposal Relief & non-residence

Temporary non-residence and business Asset Disposal Relief / Entrepreneur's Relief 

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I am likely to be selling shares eligible for Business Asset Disposal Relief / Entrepreneur's Relief this year. I am temporarily non-tax resident, and therefore my understanding is no capital gains would be immediately due. 

However, I expect that I will become tax resident again before the 5 year time period elapses, and I would still hope to claim disposal relief if possible. I believe the time period for claiming relief would have passed by the time I am resident again.

Are there any options I should consider? I wondered if I could/should pay capital gains now anyway, or at least claim the portion eligible for disposal relief, despite being non-resident, so I do not miss out on disposal relief when capital gains becomes due later? Thank you.

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By gainsborough
12th Jul 2020 17:44

Based on current rules, a claim for Business Asset Disposal Relief needs to be made by the anniversary of the 31st January following the tax year of the disposal, i.e. 31st Jan 2023 for a 20/21 disposal (TGCA 92 s169M).

For temporary non-residents (and also individuals on the remittance basis), the advice is usually to file a protective claim before residence resumes - either using Section A of the claim form found at HMRC helpsheet 275 or in writing. As always, a good idea to consult with an accountant before the disposal is made to ensure no planning points are missed.

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