ATT publishes Finance Bill 2018-19 briefings

Released 03 December 2018

The Association of Taxation Technicians (ATT) has published a written submission on Finance Bill 2018-19, Cl. 38, Sch. 15 Entrepreneurs’ Relief.

Finance Bill 2018-19, Cl. 38 and Sch. 15 includes provisions to amend Entrepreneurs’ Relief (ER) from 6 April 2019 including:

Enabling individuals whose shareholdings are ‘diluted’ below the 5% qualifying threshold following a further issue of shares as part of a fundraising exercise to retain ER on the gain on their shares up to the point of dilution. Without the provision, once their holding dropped below 5%, the individual would lose any entitlement to ER.

Extending the minimum period of time that the entrepreneur has to hold assets for ER to be available on disposal from one year to two years.

The ATT highlights two possible unintended consequences of the changes relating to the requirement that dilution shares not be issued as part of arrangements to secure a tax advantage, which could be failed by use of schemes such as the Enterprise Investment scheme, and the test of being an officer or employee for two years, which could be failed where a company has been reorganised or restructured. The ATT suggests possible remedies to the issues identified.

View the submission at Finance (No3) Bill - ATT briefings.

Be the first to vote