Business disposal specialists

business disposals
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Frequently Asked Questions

We understand that you might have lots of questions when looking for an accountant. For this reason, we have compiled a list of frequently asked questions for you, which we hope will be helpful. However, if you have any further questions, please contact us.

What is Business Asset Disposal Relief (entrepreneurs’ relief)?

Business Asset Disposal Relief (formally referred to as entrepreneurs’ relief) is a form of tax relief that can apply when you decide to sell off some or all of your business, saving on your capital gains tax liability. This is another area of business ownership that can get complicated, due to the many variables which determine whether or not you are eligible.

What is the eligibility criteria for the Business Asset Disposal Relief?

In order to qualify for the tax relief when selling your business, you must meet the following requirements for at least the two years prior to the date of sale:
– The company is trading
– You have held 5% or more of the business’s share capital and 5% of the voting share capital.
– You are an employee or office holder of a limited company or the sole trader or business partner of the company.
– You need to have met the qualifying period: this is two years, with the end date being the date of the share disposal.
– You haven’t already exceeded the lifetime cap of £1 million.

How to calculate Business Asset Disposal Relief?

Calculate the amount of Business Asset Disposal Relief you may be eligible for by following these steps:
– Calculate your total taxable gain (you might need an accountant to help you to do this)
– Take away your Annual Exempt Amount for Capital Gains, which is £12,300 for individuals but will soon be reducing to £6,000 and then £3,000.
– If you qualify for Business Asset Disposal Relief, you will only pay 10% tax on the remaining figure

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