Entrepreneurs Relief and Investment Assets

It's worthwhile remembering that the new Entrepreneurs relief applies the same restrictions as taper relief. The guidance notes issued by the Revenue state that it will only apply to trading companies and that they will be using a similar test for this as for taper relief. As such there is no requirement for an apportionment of share value etc when the company holds some trading and non trading assets. Essentially this means that a company is likely to qualify for all or nothing - unlike other reliefs such as gift relief where there can be an apportionment of the relief to the trading element. Therefore any company or business with substantial non trading assets such as cash not required for investments or let properties would fail to qualify. This would then represent an effective 80% increase in capital gains tax on the disposal for gains within the £1M limit. As before April 2008 the level of cash and any non business assets should be carefully monitored (and extracted if needs be).