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Author: JW / / Latest News

Qualifying for CGT Entrepreneurs Relief

For a shareholder to qualify for CGT entrepreneur’s relief on the disposal of their shares, they must tick a series of boxes. They must:

  • be an officer or employee of the company (or group).

  • hold 5% or more of the company’s ordinary share capital voting rights for 12 months prior to the disposal.

  • the company must be a trading company, or the holding company of a trading group (throughout the same 12-month period).

In a recent tax case, the judge agreed with HMRC that in, determining whether or not the shareholders held the required 5% of the ordinary share capital. All of the company’s shares should be considered except those with a fixed rate of dividend (preference shares). A lower court previously decided that shares with no entitlement to dividends and voting rights could be disregarded.

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