Practice Question 34 – CGT – Entrepreneurs' Relief

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April 14, 2018 at 9:22 am #446631
annemiquel2
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Dear Sir,
I have a question regarding Practice Question 34 – CGT – Entrepreneurs’ Relief

Jenny disposed of her entire business in October 2017 giving rise to the following gains and losses.
Goodwill 100,000
Factory used in the business 250,000
Investment commercial property 80,000
Warehouse (50,000)

In the answers I see that we have allocated the loss on the warehouse to the ER pool. When I did the exercise on my own, I had claimed it directly against the gain on the investment, to try and reduce as much as possible the gains taxed at the higher rate.
Could you explain me why this was not possible?
Is it because all items eligible to ER have to be claimed together and we cannot make a “partial claim”?

Thanks a lot for your help,
Anne
April 14, 2018 at 12:48 pm #446644
Tax Tutor
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Correct – we must net out any gains and losses on the disposal of the business assets and the net gain then qualifies for ER, but any other losses (like in this question the loss b/f) will indeed be set off against those gains taxable at the highest tax rates!
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