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Entrepreneurs' Relief on ex business property

Entrepreneurs' Relief on ex business property

I have a client who was trading from his premises for many years, then set up working from home and rented out said premises. The tenant has now made a good offer for the property so I've been asked to look at the potential CGT situation.

Please can someone confirm what I think to be the case, in that he cannot get ER as he is not in business there at the time of the potential sale ?  And that there is no time apportionment ? 

Thanks.

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23rd Feb 2016 09:36

Correct

As Rebecca Caves article today elsewhere on the site notes Entrepreneurs’ relief is only given if the taxpayer disposes of a business, a part of a business or a business asset. Where an asset is disposed of the asset has to have been in use for the purposes of the business at the date the business ceases (s169I(2)(b)) and the disposal has to take place within three years of the cessation of the trade in which it was used(s169I(4)).  As you note there are no time apportionment provisions that will help you where these conditions are not satisfied 

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By JimFerd
23rd Feb 2016 10:05

If the above conditions were met and the sale qualified for ER, then there may be some time-apportioning to do if the property was used by your clients company and there was a rent paid.

The time apportioning would only be appropriate though, if the rental charge spanned before and after 2008 (I think, when ER first came in).

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