CGT entrepreneurs’ relief - officer or employee?

CGT entrepreneurs’ relief is available when owners of trading companies sell their shares, provided certain conditions are satisfied for the 12 months prior to sale. One condition is that the individual has 5% voting control, but a further condition is that they are an officer or employee of the company.

There have been a number of recent cases testing the Court’s interpretation of the meaning of being an officer or employee, with some fortunate results where directors had recently resigned. The safest way to avoid the risk of losing this valuable relief would be to continue to be an officer of the company or remain on the payroll up to the date of the sale.


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Harris+Co is a trading name of Harris & Co Limited, which is a limited company registered in England & Wales: No. 8935187, Registered Office: Marland House, 13 Huddersfield Road, Barnsley, South Yorkshire S70 2LW. The term partner indicates a principal of Harris & Co Limited who is not in partnership for the purpose of the Partnership Act 1890. A full list of principals’ names is available at the Registered Office. Registered to carry on audit work in the UK and regulated for a range of investment business and consumer credit activities by the Institute of Chartered Accountants in England and Wales. Details about our audit registration can be viewed at www.auditregister.org.uk for the UK under reference C003785105.