Business asset disposal relief and voting rights

When advising an individual that they can claim business asset disposal relief on a share disposal it must be possible to demonstrate that those shares were held in their ‘personal company’ (as defined in TCGA 1992 s 169S). Further since 6 April 2019 the qualifying conditions for the relief – still referred to by many as entrepreneurs’ relief – must be satisfied throughout the two-year (previously one-year) period ending in most instances on the date of the share disposal.

It is well known that to be their personal company the claimant must have held at least 5% of the ordinary share capital for the two-year period. Perhaps less well known is the additional requirement that – by virtue of the ordinary shares held – at least 5% of the voting rights in the company must also have been exercisable throughout the same period. This latter...