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Entrepreneurs’ Relief: qualifying beneficiary at time of disposal by trustees

Entrepreneurs’ Relief

FTT: individual only needs to be qualifying beneficiary at time of disposal by trustees for ER, rather than throughout 2 years pre disposal.

Nick Pheasey

Partner, Family Office and Private Client

KPMG in the UK


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In The Quentin Skinner Settlements v The Commissioners of HMRC [2019] UKFTT 0516 (TC) the First-tier Tribunal (FTT) concluded that an individual only needs to be a qualifying beneficiary at the time of the disposal of qualifying assets by a settlement for trustees to potentially qualify for Entrepreneurs’ Relief (ER). This decision is contrary to current HMRC guidance in CG63985 which sets out that for trustees to qualify for ER, the beneficiary must have held an interest in possession throughout the relevant 24 months prior to the date of disposal (12 months for disposals pre 6 April 2019). The FTT’s finding highlights the importance of identifying and addressing tax issues both before and during the two years leading up to the sale of a business, including the possibility of protecting family wealth while benefitting from the reduced ER rates of capital gains tax.

You may access the Quentin Skinner judgment by clicking here, as well as HMRC guidance in CG63985 here.

Please contact us should you wish to discuss this in further detail.

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