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Entrepreneurs’ relief: the qualifying beneficiary requirement

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In Quentin Skinner 2005 Settlement L and others, the tribunal decided that, for the purposes of entrepreneurs’ relief, when a trust disposes of trust business assets, the qualifying beneficiary needs an interest in possession only at the date of disposal. TCGA 1992 s 169J(4) did not implicitly require the individual to be a ‘qualifying beneficiary’ throughout the one-year (now two-year) period referred to in s 169J(3). The decision makes it easier for trusts to utilise entrepreneurs’ relief. Trusts which sell assets should consider whether they might qualify for entrepreneurs’ relief via a beneficiary, and whether they can grant a beneficiary an interest in possession in order to do so.

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