Budget blog: Entrepreneurs relief – do you still qualify?

31st October 2018

In addition to the extension to the of the qualifying period for entrepreneurs’ relief from one year to two years, a disposal of shares in a personal company has also seen a change to tests of a ‘personal company’.

Currently a company is a personal company if an individual holds at least 5% of the share capital of the company that provides for at least 5% of the voting rights – this condition having to be met for the twelve months leading up to the date of the disposal.

Two new conditions will now have to be met for disposal on or after 29 October 2018. These are that the 5% interest must also provide for an entitlement to at least 5% of the company’s distributable reserves and at least 5% of the company’s assets are available for distribution on a winding up – both the current and new conditions now having to be met for two years leading up to the date of disposal. 

To find out more, contact our team.