This Virtual Tax Partner © 'VtaxP' © tool checks Business Asset Disposal Relief conditions for the disposal of the whole or part of a business, or assets used by the business when it ceases.
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Business Asset Disposal Relief (BADR) (formally called Entrepreneurs' Relief) is a relief that reduces the rate of Capital Gains Tax (CGT) paid to 10% on the disposal of a qualifying business asset.
The difficult part is working out the different rules.
Does your disposal qualify for BADR?
This VtaxP BADR Sole trader tool now overs the following disposals:
Disposals made by an individual:
- Between 6 April 2014 and 29 October 2018
- Between 29 October 2018 and 5 April 2019
- On or After 6 April 2019
Covering the following different scenarios:
- Disposal of a sole trade business to a third party
- Disposal of part of the business to a third party
- Disposal of the different assets of a sole trade business
- Disposals with or without goodwill
- Disposal to a close company
- Disposal to a connected company
- Disposal by incorporation followed by a share sale
- Disposals that trigger the anti-avoidance rules
- All combinations of any of the above
1. What does the tool do?
"Congratulations, your business disposal will qualify for Business Asset Disposal Relief"
- The tool works out if your disposal meets the qualifying criteria to claim Business Asset Disposal Relief.
- It applies across multiple different permutations of the rules and provides different outcomes to around 50 permutations.
- It does not work out your gain or tax due, as these are the next steps. If BADR does apply, tax is 10% of your gain (subject to the lifetime limit for BADR).
2. How long does it take?
- Allow about 60 minutes if you are new to it and need to check some of the definitions and meanings (these are supplied by the tool).
- You also need to gather data to use the tool, you will soon work out what you need.
- About 3 minutes once you have run through it.
3. How long did it take to write and test this tool?
- About three weeks, a lot longer than we thought: even we had no idea how complicated this relief has become.
4. How long would it take to work your way through the legislation without the tool?
- It depends, but we would normally price to allow ourselves somewhere between three to five hours to check line by line (which is what the tool does for you)>
5. Which legislation?
The CGT legislation is:
Section 169H to 169V TCGA 1992, see Business Asset Disposal Relief legislation
6. What is the difficulty rating for Business Asset Disposal Relief?
- High: don't try this at home unless you are really into tax law
7. What are the terms and conditions?
- You DO NOT need to be a subscriber to www.rossmartin.co.uk in order to use this tool.
- The login for the tool will be sent to you separately following payment.
- Use of the tool depends on your acceptance of our Terms and Conditions
- We are happy to double check your results with you if you need further assistance.
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If you have more than one office then go to the Multi Office subscription (next one down). You are given one free partner/director per office, if you have multiple partners/directors you pay £159 + VAT per additional person.
Subscribe to unlock www.rossmartin.co.uk. The annual fee is just £519 + VAT, per office.
If you have more than one office then you pay £519 + VAT per extra office. this costing gives you one free partner/director per office: these are automatically given logins.
If you are a multiple partner/director business you pay £159 + VAT per fee earning partner or director, this is regardless as to whether they use the service.