PART 4

Capital gains tax

Entrepreneurs' relief

Entrepreneurs' relief: associated disposals
84
1
Section 169K of TCGA 1992 (disposal associated with relevant material disposal) is amended as follows.
2
In subsection (1)—
a
in paragraph (a), after “A1,” insert “ A1A, ”, and
b
in paragraph (b), for “and C” substitute “ , C and D ”.
3
After subsection (1A) insert—
1AA
Condition A1A is that P makes a material disposal of business assets which consists of the disposal of the whole of P's interest in the assets of a partnership, and—
a
that interest is an interest of less than 5%,
b
P holds at least a 5% interest in the partnership's assets throughout a continuous period of at least 3 years in the 8 years ending with the date of the disposal, and
c
at the date of the disposal, no partnership purchase arrangements exist.
1AB
Subject to subsection (6A), for the purposes of conditions A1 and A1A, in relation to the disposal of an interest in the assets of a partnership, “partnership purchase arrangements” means arrangements (other than the material disposal itself) under which P or a person connected with P is entitled to acquire any interest in, or increase that person's interest in, the partnership (including a share of the profits or assets of the partnership or an interest in such a share).
4
In subsection (1E), in the words before paragraph (a)—
a
at the beginning insert “ Subject to subsection (6A), ”, and
b
after “means arrangements” insert “ (other than the material disposal itself) ”.
5
After subsection (3A) insert—
3AA
Subject to subsection (6A), for the purposes of condition B, in relation to a disposal mentioned in that condition and a partnership, “partnership purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire any interest in, or increase that person's interest in, the partnership (including a share of the profits or assets of the partnership or an interest in such a share), but does not include any arrangements in connection with a material disposal in relation to which condition A1 or A1A is met.
6
In subsection (3B), for “arrangements” to the end substitute “ share purchase arrangements ”.
7
After subsection (3B) insert—
3BA
Subject to subsection (6A), for the purposes of condition B, in relation to a disposal mentioned in that condition and company A, “share purchase arrangements” means arrangements under which P or a person connected with P is entitled to acquire shares in or securities of—
a
company A, or
b
a company which is a member of a trading group of which company A is a member,
but does not include any arrangements in connection with a material disposal in relation to which condition A2 or A3 is met.
8
In subsection (3C), for “(3B)” substitute “ (3BA) ”.
9
After subsection (4) insert—
4A
Condition D is that the disposal mentioned in condition B is of an asset which P owns throughout the period of 3 years ending with the date of that disposal.
10
Omit subsection (6).
11
Before subsection (7) insert—
6A
For the purposes of this section, in relation to a material disposal of business assets and a disposal mentioned in condition B, arrangements are not partnership purchase arrangements or share purchase arrangements if they were made before both disposals and without regard to either of them.
12
In subsection (9), after “entitled to share in the” insert “ capital ”.
13
The amendments made by subsections (2)(a), (3) to (8) and (10) to (12) have effect in relation to disposals made on or after 18 March 2015.
14
The amendments made by subsections (2)(b) and (9) have effect in relation to disposals of assets which are acquired on or after 13 June 2016.