If you’ve logged onto this article thinking, “Hey, I’m a budding innovator and I’ve never heard of this ‘Entrepreneur Relief’. What is it relief from? Bee-stings? Is it relief from bee-stings?”. No it’s not relief from bee-stings, but it is equally as important for anyone out there looking to launch an innovative business venture.
2016 is the year of the entrepreneur. Technology is reaching an apex of both accessible and still specialised and Dads globally are no longer ashamed of telling their co-workers that their sons/daughters are trying to become entrepreneurs. There’s no better time to start your own business.
However, you can’t just dive right in. You need to have a firm grasp on all the governmental fixtures and Entrepreneur Relief is one of these.
In short, this relief reduces the amount of Capital Gains Tax on business assets as long as you’ve met the qualifying conditions across a one-year ‘trial period’ up to £10 million of capital. If you’re ever in a position where you have to worry about the limit roof, just remember who let you know about this relief.
The relief is available to the individual and some trustees of the entrepreneurial project. To claim this relief, according to the Gov website, “you must make a claim to HMRC in writing by the first anniversary of the 31 January following the end of the tax year in which the qualifying disposal takes place” – this should make sense to you if you’re already generating capital with your business.
From that point on, once you’ve notified the HMRC, you just claim Entrepreneur Relief in your tax return with this form. Depending on the level of your gains, you could be owed somewhere between 10-18% relief from tax. Simple as that.
If you want to know more about all the T&Cs and legal mumbo-jumbo, be sure to swing by here to get the full low-down on entrepreneur relief.