VtaxP Tools: Business Asset Disposal Relief (Entrepreneurs' Relief) business & asset disposals

This Virtual Tax Partner © 'VtaxP' © tool checks Business Asset Disposal Relief conditions for the disposal of the whole or part of a business, or assets used by the business when it ceases.

Business Asset Disposal Relief (BADR) (formally called Entrepreneurs' Relief) is a relief that reduces the rate of Capital Gains Tax (CGT) paid to 10% on the disposal of a qualifying business asset.

The difficult part is working out the different rules.

Does your disposal qualify for BADR?  

This VtaxP BADR Sole trader tool now overs the following disposals:

Disposals made by an individual:

• Between 6 April 2014 and 29 October 2018
• Between 29 October 2018 and 5 April 2019
• On or After 6 April 2019

Covering the following different scenarios:

1. Disposal of a sole trade business to a third party
2. Disposal of part of the business to a third party
3. Disposal of the different assets of a sole trade business 
4. Disposals with or without goodwill
5. Disposal to a close company
6. Disposal to a connected company
7. Disposal by incorporation followed by a share sale
8. Disposals that trigger the anti-avoidance rules
9. All combinations of any of the above

Tool FAQs

1. What does the tool do?

"Congratulations, your business disposal will qualify for Business Asset Disposal Relief"

• The tool works out if your disposal meets the qualifying criteria to claim Business Asset Disposal Relief.
• It applies across multiple different permutations of the rules and provides different outcomes to around 50 permutations.
• It does not work out your gain or tax due, as these are the next steps. If BADR does apply, tax is 10% of your gain (subject to the lifetime limit for BADR).

2. How long does it take?

• Allow about 60 minutes if you are new to it and need to check some of the definitions and meanings (these are supplied by the tool).
• You also need to gather data to use the tool, you will soon work out what you need.
• About 3 minutes once you have run through it.

3. How long did it take to write and test this tool?

• About three weeks, a lot longer than we thought: even we had no idea how complicated this relief has become.

4. How long would it take to work your way through the legislation without the tool?

• It depends, but we would normally price to allow ourselves somewhere between three to five hours to check line by line (which is what the tool does for you)>

5. Which legislation?

The CGT legislation is:

Section 169H to 169V TCGA 1992, see Business Asset Disposal Relief legislation

6. What is the difficulty rating for Business Asset Disposal Relief?

• High: don't try this at home unless you are really into tax law

7. What are the terms and conditions?

• You DO NOT need to be a subscriber to www.rossmartin.co.uk in order to use this tool.
• The login for the tool will be sent to you separately following payment.
• Use of the tool depends on your acceptance of our Terms and Conditions
• We are happy to double check your results with you if you need further assistance.

Not a subscriber to www.rossmartin.co.uk? Then sign up and add this VtaxP tool at the same time.