Michelle Robinson considers some points of uncertainty in a round-up of recent cases tackling entrepreneurs’ relief
After years of relatively stable legislation, Finance Act 2019 brought significant changes to the entrepreneurs’ relief (ER) eligibility rules. These changes include doubling the minimum period over which the ER qualifying conditions must be met in order for relief to be available on material disposals (now two years instead of one). It also added an additional economic condition that must be met in order for ER to be available on company interests (referred to as the ‘5% test’ in this article).
Despite these changes, much of the legislation remains as it was initially enacted by Finance Act 2008. Three recent First-tier Tribunal decisions have brought additional clarity to some longstanding areas of uncertainty.