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Can you claim entrepreneurs relief for companys

Company selling shares it owns in another company

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Can a company who owns shares in another company claim entrepreneurs relief - my client is insisting that we can but looking at the wording online this only applies to individuals?

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By pfluge
16th May 2019 08:50

I should of added that this company who owns the shares sold the shares to another company (so company to company)

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By Tim Vane
16th May 2019 08:56

Entrepreneurs relief is a CGT relief.
Companies don't pay CGT.
No tax, no relief.

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Replying to Tim Vane:
RLI
By lionofludesch
16th May 2019 09:05

Tim Vane wrote:

Entrepreneurs relief is a CGT relief.
Companies don't pay CGT.
No tax, no relief.

Yes - tell your client that he doesn't get Entrepreneur's Relief but the upside is that there's no CGT.

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Replying to Tim Vane:
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By Tax Dragon
16th May 2019 09:19

Tim Vane wrote:

Entrepreneurs relief is a CGT relief.
Companies don't pay CGT.
No tax, no relief.

What's "a CGT relief"? Why use terms that don't exist in law to answer a question that, for once, makes reference to the law?

The OP is spot on - ER, per legislation, does not apply because it's a relief for individuals (and Trustees by extension); the legislation does not say it's "a CGT relief".

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Replying to Tax Dragon:
By Duggimon
16th May 2019 10:05

That's a bit pedantic, isn't it? It's a relief defined in the Taxation of Chargeable Gains Act as giving a lower rate of capital gains tax, to say that's fundamentally different to calling it a CGT relief is a bit of a stretch, no?

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Replying to Duggimon:
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By Tax Dragon
16th May 2019 10:15

Not really. It's a relief provided under TCGA. TCGA applies to companies.

You should be pointing out the pedantry in replies like "it's a CGT relief, companies don't pay CGT".

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Replying to Tax Dragon:
By Duggimon
16th May 2019 11:16

No, I mean it literally says in the first line of the bit of legislation in which it's defined "This Chapter provides for a lower rate of capital gains tax in respect of qualifying business disposals (to be known as “entrepreneurs’ relief”)." and you're asserting that and "CGT relief" are two different things.

I don't think it's pedantic to point out Entrepreneurs Relief doesn't apply to companies because it relates to a tax that doesn't apply to companies. Indeed it's just answering the original question.

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Replying to Duggimon:
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By Tax Dragon
16th May 2019 11:46

I don't feel strongly enough to disagree.

I do think that Tim's oft-repeated observation that "companies don't pay CGT", whilst correct, is - maybe just occasionally - intended to misguide, rather than to assist. (Lion's contribution was equally unhelpful.) As you (and Tim) well know, TCGA does apply to companies. And it's not s169H(1) that stops ER applying to companies.

[Being a natural born pedant, though, what does s169H(1) actually mean? Read it again, carefully. (I know it's two half sentences pushed together, due to the history of the relief, but, really, isn't it now a nonsense? Just as well it doesn't do anything!)]

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Replying to Tim Vane:
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By CTA
16th May 2019 12:14

To continue the pedantry, the statement "Companies don't pay CGT" is also incorrect.

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Replying to CTA:
RLI
By lionofludesch
16th May 2019 12:25

I'm more likely to pick up on "companys" as the plural of "company".

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Replying to CTA:
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By Vile Nortin Naipaan
16th May 2019 12:33

Moving forward, that statement is correct.

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Replying to CTA:
By Duggimon
16th May 2019 12:52

You're going to have to explain that one. It might be misleading by glossing over the equivalent for companies, but it's definitely not wrong.

TCGA applies to companies, CGT does not.

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Replying to Duggimon:
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By Vile Nortin Naipaan
16th May 2019 12:58

CGT applies to non-resident companies (except in relation to assets used for the purposes of a trade carried on through a UK permanent establishment) up to 2018/19.

Non-resident companies were liable to CGT on gains on UK residential property up to 2018/19. From 2019/20 they are liable to corporation tax on their chargeable gains on UK real property interests (including shares in other companies that have such interests).

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Replying to Vile Nortin Naipaan:
Psycho
By Wilson Philips
16th May 2019 13:02

Likewise for UK companies with ATED-related gains

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Replying to Wilson Philips:
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By Tax Dragon
16th May 2019 13:36

Dammit - turns out I'm not pedantic enough!! :-)

(Sorry, that was meant as a reply to CTA.)

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By Wanderer
16th May 2019 08:57

Shouldn't you be looking at the possibility of the substantial shareholding exemption?

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Replying to Wanderer:
Hallerud at Easter
By DJKL
16th May 2019 15:41
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By Vile Nortin Naipaan
16th May 2019 12:33

OP. Yes. Claim what you like.

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