Entrepreneurs relief on trust assets

The legislation on Entrepreneurs relief applies specific provisions that apply to assets that are owned by a trust. In order for business assets owned by a trust to qualify for Entrepreneurs Relief there are a number of conditions to be satisfied. In order for the 10% rate of CGT to apply the following conditons would need to be met: 1)There must be a disposal of settled business assets. This would include a case where the trust property consists of assets used for the purpose of a business or are shares in a company. 2)There must be an individual who is a qualifying beneficiary. In order to be a qualifying beneficiary they would need to have an interest in possession (otherwise than for a fixed term) in the whole of the settled property, or a part of it which includes the business. Note that if the assets sold are shares they would need to be an employee etc to qualify. 3) The business must be carried on by the qualifying beneficiary throughout the period of 1 year ending not earlier than 3 years before the date of the disposal, and the qualifying beneficiary ceases to carry on the business on the date of the disposal or within the period of three years before that date. If the trust and beneficiaries meet these conditions the gain attributable to the trust could be reduced by 4/9 (up to a gain of £1,000,000) to ensure that the trust was taxed at 10%. It would therefore be worthwhile considering whether these conditions can be met.