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Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2021/22

Authors: Chris Williams and Satwaki Chanda

Publication Date: October 2021

Publisher: Bloomsbury Professional

Law As Stated At: 10 June 2021

Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2021/22

Capital Gains Tax Reliefs for SMEs and Entrepreneurs 2021/22

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.

Brought up to date in line with FA 2021 and recent new case decisions, this update includes the following:

  • All examples updated.
  • Business Asset Disposal Relief (BADR) – commentary added on ordinary shares to reflect the Upper Tribunal decision in Revenue and Customs v Stephen Warshaw [2020] UKUT 366 (‘Warshaw’) (5.43,6.15, 14.21).
  • Social Investment Tax Relief (SITR). Commentary updated to reflect the UK’s exit from the EU (10.3).
  • Transfers of shares to corporate entities – commentary amended to reflect changes made by FA 2021 to TCGA 1992, s 167(1),(2)in relation to non-UK residents (18.22).

Author

Satwaki is a tax lawyer with a First Class degree in Mathematics. His experience covers a variety of matters, including corporate transactional work, advising entrepreneurs and SMEs, investment funds and real estate planning. Called to the Bar in 1992, he originally specialised in commercial litigation, but switched to tax in 1998 when he joined a Big Four accountancy practice. He has also worked for City law firms, but is now a freelance author, writing about business and property taxes.

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