Relief disapplied

03 December 2008

Issue: 4187 / Categories: Forum & Feedback

Shares in a private trading company were sold for cash, non-qualifying corporate bonds and shares in the acquiring company. Will they be entitled to entrepreneurs' relief on the NQCBs or the shares? The replies consider the transitional provisions in FA 2008, Sch 3 and whether these might apply here.

My husband and wife clients disposed of the shares in their private trading company (held 60% and 40% respectively) in June 2005.

They received £500 000 in cash £200 000 in non-qualifying corporate bonds (NQCBs) to be redeemed over the next five years and shares in the PLC which effected the takeover valued in June 2005 at £300 000.

The couple qualified for business asset taper relief on their shares and this was duly claimed in respect of the £500 000 cash. The value of the PLC shares received has fluctuated considerably but they are now worth approximately £350 000.

No attempt has been made by my clients to dispose of them. However the NQCBs are being encashed and the couple have remained in employment with a group company belonging to the same group as the PLC that effected the takeover.

Reading TCGA 1992 ...

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