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Allégement pour Entrepreneurs de HMRC
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Alternatively, if the payment was capital, HMRC considered it should be treated as income under anti-avoidance provisions which relate to the sale of income from personal occupations; which in my opinion is the classic, you can t have your cake and eat it scenario.
Aside from situations where the farming business of the individual sole trader or the farming partnership ceases on the sale of the whole of the farming business, the sale of an asset from the business is not likely to be eligible for ER and so the usual CGT rates and more likely the full rate of 28 could be payable on the gain arising from the sale.
Readers should of course be aware that such a conclusion might not be so readily available in another case and, so, it is always advisable to ensure that written records of shareholder agreements are as comprehensive as possible.
The relevant conditions mentioned above are that throughout a period of one year ending not earlier than three years before the date of disposal, the company is the qualifying beneficiary s personal company, the company is a trading company or the holding company of a trading group and the qualifying beneficiary is an officer or employee of the company.
