Print

This is a freeview 'At a glance' guide to Capital Gains Tax (CGT) reliefs for businesses.

Which Capital Gains Tax (CGT) reliefs apply when a person replaces or disposes of an asset used by a business, the whole or part of a business, or shares in a company?

There are now six main reliefs, all references are to the Taxation of Chargeable Gains Act 1992 (TCGA). 

Relief Type of asset Section
Rollover (replacement of business assets) Assets used for the purposes of a trade or a deemed trade 152
Rollover (incorporation) A business and its assets (no requirement for the business to be a trade) on incorporation in return for shares. 162
Disincorporation (for transfers between 1 April 2013 and 31 March 2018)

Disposal of a company's business; its land and property and goodwill, to its shareholders

(no requirement for the business to be a trade)

162B
Rollover relief (compulsory purchase)

Land sold due to compulsory purchase, where the consideration is reinvested to acquire new land

247

Holdover (gifts)

Asset used for the purpose of a trade, or shares in a trading company

s.260: assets (not necessarily business assets) that are immediately chargeable to IHT

165 /260
Business Asset Disposal Relief (Entrepreneurs' Relief)

A business and business assets. 'Business' means a trade, profession or vocation.

Business assets include shares in a trading company

169H
Investors' Relief

A sale of shares by a company investor

169VB

 

Rollover: replacement of business assets

The relief is available to individuals and companies.

Rollover relief (section 162): transfer of a business to a company

This relief is available to individuals.

Disincorporation relief (section 162B): transfer of a company's business to its shareholders

This relief was available to companies. It was withdrawn on 31 March 2018.

Rollover relief: compulsory purchases of land (section 247)

This rollover relief is available when land is disposed of to an authority exercising compulsory powers.

Holdover or 'gift' relief (section 165 or 260) 

This relief is available to individuals and the trustees of a settlement.

Business Asset Disposal Relief (formerly known as Entrepreneurs' Relief): disposals of business assets

The relief is available to individuals and the trustees of a settlement.

The relief ensures that chargeable gains up to a lifetime limit that are subject to the relief are taxed at 10%, as opposed to 20%. It applies to gains made:

See: Business Asset Disposal Relief (Entrepreneurs' Relief)

See How to incorporate a business for an example of how this relief is calculated and interacts with the other reliefs.

 Investors' Relief


Oak ad
Are you enjoying our content? 

Thousands of accountants and advisers and their clients use www.rossmartin.co.uk as their primary TAX resource.

Register with us now to receive our unique FREE Tax Planning Tips and Advice Guide & our FREE OMB Newsletter.