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when do u know when u have to use enterpreneurs relief and when u dont have to use ? i mean the format where qualifying for enterpreneurs relief and not qualifying ?
When somebody sells their whole business or a big portion of it you should consider en. relief. For example If I owned a business which had 4 factories, general offices, goodwill tc… and I dispose of 1 factory, This isn’t 1) disposing of my whole business and 2) isn’t disposing of a substantial part of it… hence there is no entrepreneurs relief. Note you also need to own the part you are disposing of for at least 12 months.
En. relief is also available for disposals of shares. So when the question states shares are being disposed of consider VOTES -at least 5% Voting rights, Owned for at least 12 months, Trading company, Employed by this company, Share capital at least 5%. If these conditions are met then en. relief is available.
Be careful as sometimes the question states that En. relief is to be ignored. This usually occurs when the individual can claim incorporation relief (i.e. he is disposing of his whole business to form a company). Incorporation relief and En. relief usually go hand in hand. The question may state to ignore one of these reliefs.
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