In F Delaney v HMRC [2024] UKFTT 214 (TC) (11 March 2024) the First-tier Tribunal (FTT) held that the preparatory steps taken by the taxpayer’s close company ahead of acquiring the taxpayer’s business were not sufficient to evidence a contract had been made resulting in the taxpayer being unable to claim Entrepreneurs’ Relief (ER) (as it then was) on the business disposal.
The taxpayer had made a claim for ER in her tax return for the year ended 5 April 2016 in respect of the disposal of the taxpayer’s business (the operation of two nursery schools) to her close company (MDNSL).
Prior to 3 December 2014 a taxpayer who disposed of a business including goodwill to a limited company to which they were connected was entitled to claim ER thereby reducing the rate at which capital gains tax was paid from 28% to 10%. ER was denied...
