ER run off

My client has a furnished holiday letting property which he has owned for several years and which is currently standing at a substantial gain.

He has no intention of selling it in the near future but is aware that the favourable capital gains tax treatment – the availability of entrepreneurs’ relief (ER) giving an effective tax rate of 10% – is being taken away on 6 April 2010.

There is no time apportionment with ER; if you don’t qualify for it at the point of sale you don’t qualify at all. My client might consider selling but it’s possible that there will be a tax-driven glut in the market for holiday properties at that time because everyone will be thinking the same thing.

Presumably it is possible to transfer the property into a trust or a company in order to trigger the gain at the...