Business Asset Disposal Relief

Business Asset Disposal relief (previously called Entrepreneurs’ Relief) is one of the most attractive tax benefits any entrepreneur can get. By taking appropriate steps, entrepreneurs may gain maximum benefit from this. Today, in the United Kingdom entrepreneurs selling or giving away their business can obtain this which is an allowance of £1,000,000.

There are some measures that need to be taken care of to gain maximum benefit from business asset disposal relief. If the requirements for availing the relief are fulfilled appropriately, then any entrepreneur selling or giving away their business may gain a lot of benefits and the business asset disposal relief may prove to be quite useful.

However, it is a relief that needs to be claimed so the onus is on entrepreneurs to keep the relevant records and ensure that claims are received within the time limit.

Qualifying for Business Asset Disposal Relief

Given the attractiveness of this relief, it is unsurprising that there are some strict qualification criteria. We have seen some precarious situations where entrepreneurs have assumed they would be eligible but some seemingly unrelated business decisions may then call that into question.

You need to be confident of your position before you consider disposing all or part of your business.

We can also look at the tax structures well in advance to ensure that you are correctly placed to qualify.

We regularly help entrepreneurs to make these claims successfully.

Ways we have helped:

  • We have helped structure businesses that have various classes of shares in order to ensure that the shareholder has appropriate share rights whilst maintaining entitlement to the relief.
  • We have helped entrepreneurs bank the benefit of business asset disposal relief in cases that they sell interest in the business in exchange for minority (less than 5%) ownership of the acquiring vehicle.
  • We have maximised entitlements to business asset disposal relief through approved share option planning.
  • We have advised on partial disposals of businesses which are structured in a way that the relief has been available.