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Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2023/24

Authors: Satwaki Chanda and Sam Hart

Publication Date: January 2024

Publisher: Bloomsbury Professional

Law As Stated At: 31 October 2023

Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2023/24

Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2023/24

This specialist technical information guides you through the reliefs available for your clients' capital transactions, compares and contrasts how different types of businesses can benefit and gives guidance on how to avoid the pitfalls put in place to prevent the abuse of those reliefs. It outlines the calculation, process and application of the key tools that allow gains to be deferred, held-over or extinguished, as well as addressing the use of capital losses which may arise. The emphasis is on business asset disposal relief (formerly entrepreneurs' relief), EIS, SEIS and social investment relief.

It is structured to reflect the changing needs of a business and its owners throughout the business lifecycle; from sole-trader to incorporation, expansion to a group, withdrawal of the founders, passing-on the business and disincorporation.

This update includes the following:

  • the reduction of the annual exemption from £12,300 to £6,000, with a further reduction to £3,000 to take effect from 2024/25. (1.27)
  • The Social Enterprise Investment Scheme has closed to new investment from 6 April 2023. However, the rules are still relevant for those holding existing SITR investments that have been used to shelter a capital gain (see Chapter 10).
  • An expansion of the Seed Enterprise Investment Scheme – raising various monetary limits such as the gross assets test, the amount of risk capital funding a business can raise, together with the subscription limits (see Chapter 7).
  • two new cases on business goodwill (4.6 and 13.67)

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