Entrepreneurs' relief for sole traders

A sole trader may qualify for entrepreneurs' relief if there is a Material disposal   This could be a material disposal of business assets where the trader disposes of whole or part of their business see here, or of business assets on or after cessation see here(TCGA 1992, s 169I (2))

Unlike taper relief, there is no general entitlement to relief on disposal of business assets. This can cause significant issues where the sale of a business, a part of a business or just business assets takes place. The entrepreneur may simply assume that profits on the disposal will be taxed at 10%. However, without taking advice in advance, they may find they lose entitlement on significant sales from their business.

For entrepreneurs' relief to be available, the business, or part of a business – link 6, must have been owned by the vendor for one year prior to disposal. This is regardless of whether it has been held by a spouse or other connected party. Each individual must qualify in their own right. CG63970