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Entrepreneur Relief for Trusts?

Can a trust be eligible for Entrepreneur relief? Im reliable informed that this is possible?

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    Firstly this is possible however there are some conditions to have entrepreneur relief for a Trust. Entrepreneurs Relief is worth a lot of money in tax savings from capital gains tax of either 28% or 18% and these can be reduced to 10%. The following conditions are key to getting the entrepreneur relief:

    1. The trust must be a qualifying trust:
    The trust must be an interest in possession trust and NOT a discretionary trust.

    2. Qualifying business.
    Similar conditions to the individuals applies and these include: trading business eg the trust may hold shares in the family trading company.

    3. The beneficiary has to be employed by the company, and also own at least 5% of the company shares personally, i.e. outside the shares owned by the trust. And this cannot be arranged at the last minute: it needs to be the case for at least 12 months before the business is sold.

    The Entrepreneurs Relief threshold, just one of them, is then shared proportionately between the beneficiary and the trust – they don’t have a separate threshold each. The claim for Entrepreneurs Relief has to be made jointly by the trustees and the qualifying beneficiary. The claim should accompany the trustees’ tax return for the year of the disposal; and a copy can be enclosed with the beneficiary’s personal tax return.


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