CG63970 | Business Asset Disposal Relief: claims to relief

Entrepreneurs’ Relief was renamed in Finance Act 2020 with effect from 6 April 2020. The new name is generally used in this guidance but should be read as applying to times before that date.

TCGA92/S169M

Business Asset Disposal Relief is only due upon a claim being made as follows:

1. upon a qualifying business disposal made by an individual - the claim must be made by that individual

2. upon a disposal of trust business assets - it must be made jointly by the trustees and the qualifying beneficiary concerned.

A claim for relief can only be made if the operation of the rules for computing relief (found in TCGA92/169N - see CG64125) results in there being a sum in respect of which relief can be given - TCGA92/S169M(4). In effect that means that, after netting off gains and losses, computed in accordance with the rules of TCGA, on the disposals of assets that together make up the material disposal of business assets, a net gain arises.

For an individual, where a notice to file a return has been issued, the claim should be made in the personal return for that individual. For a Trust, the claim must be made jointly by the trustee and beneficiary and so cannot be included in a return. This claim will be subject to the provisions of TMA70/Sch1A.

Time Limit

Claims for relief must be made on or before the first anniversary of the 31 January following the tax year in which the qualifying business disposal is made TCGA92/S169M (3).

A claim to Business Asset Disposal Relief is not irrevocable, it may be amended or revoked within the time limit and the provision for self assessment and stand alone claims may extend the time limit for amendment, particularly when an enquiry is opened.

Spouses and civil partners

Spouses or civil partners are separate individuals and may each make a claim. They are each entitled to Business Asset Disposal Relief up to the maximum amount available for an individual, provided they each satisfy the relevant conditions for relief.