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Entrepreneurs Relief

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Any guidance on ER in this case. Even pointers to cases to look at. 

Ive a client with a shop and store. The shop is based in a place with difficult access so they bought the store some way away to take deliveries of and hold business stock. 

Theyve been in business use for forever and  a day and will soon be up for sale. They may sell as one but, equally, I need to consider the tax treatment if they dont and they sell at different times. 

Any pointers? Ta. 

 

 

Replies (11)

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By Accountant A
11th May 2019 01:33

Have you looked at HMRC Guidance - HS275 Entrepreneurs' Relief (2018)?

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By chicken farmer
11th May 2019 11:07

Also read the legislation. The relief is only available of the disposal of a business or part of a business. If client is continuing with the business, read up on roll-over relief.

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Replying to chicken farmer:
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By Tax Dragon
11th May 2019 11:36

Well, not "only".

But I agree - if the OP is undertaking tax planning then s/he needs to be reading legislation as well as guidance.

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Replying to Tax Dragon:
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By chicken farmer
11th May 2019 13:38

Yes there are other situations. I was tempted to ask whether there was a company involved but if the questioner reads the legislation he or she should become aware of those other situations. (Too many questioners fail to read the legislation before asking the question)

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Replying to chicken farmer:
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By Kaylee100
11th May 2019 15:45

Hi, no company. Its a sole trader. I really shouldnt post late at night. Sorry, I only gave half the story.

Im comfortable with the rules in general - thanks for the link to the HMRC guidance. Its trying to cover all bases for issues that might arise as the "parts"may be sold separately. And the fact one part cannot actually trade without the other, but sold the other way around it could.

I guess im looking for case law mainly where parts have been sold in different ways.

Apologies for not having been clearer and thanks for all the comments.

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Replying to Kaylee100:
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By Tax Dragon
11th May 2019 22:34

Does the store make money independent of the shop? If not then it's more an asset of the business than part of the business.

Kaylee100 wrote:

I guess im looking for case law mainly where parts have been sold in different ways.

I'm hoping the way I've worded the above will put you in mind of some old case law on retirement relief. Not old enough to remember? Me neither, but I'm told ER resurrected much RR code, and with it the relevance of the old cases.

That may be where you could look (I'm not aware of much of use on ER directly). That said, I would hesitate to rely on the old cases too heavily.

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Replying to Tax Dragon:
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By Kaylee100
12th May 2019 08:43

Yes, I was "on the edge of RR". In my studies but not in my work, at that time.

The store is literally for holding goods, like a stock room. Deliveries are made there and they hold them there too.

Thank you TD!

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Replying to Kaylee100:
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By Tax Dragon
12th May 2019 09:13

CG64020 any use?

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Replying to Kaylee100:
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By chicken farmer
12th May 2019 09:16

You haven't yet told us whether the business is continuing in different premises or whether business is being sold together with the assets. Until you do, no-one can tell whether entrepreneurs' relief is in point at all.

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Replying to chicken farmer:
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By Kaylee100
12th May 2019 09:36

Yes. Complete sale. No continuity of that business.

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Replying to chicken farmer:
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By Accountant A
11th May 2019 15:34

chicken farmer wrote:

(THE OVERWHELMING MAJORITY OF questioners fail to read the legislation before asking the question)

Fixed that for you!!

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